Key Takeaways

HNT has recorded notable gains recently, but supply zone ahead could be the end of it. Mounting selling pressure from the spot market and weakening momentum now threaten a sharp reversal.

Helium [HNT] surged by 10% over the past 24 hours, leading the crypto market during this period. However, exchange outflows and bearish indicators suggest that HNT’s rally may be short-lived.

According to AMBCrypto analysis, while HNT remains bullish on the surface, signs of weakening market structure and liquidity drainage indicate a likely pullback. Here’s what to watch.

HNT faces roadblock — Here’s what it means

A review of the 1-day chart showed HNT approaching a critical supply zone between $3.90 and $4.24. This area has historically triggered significant sell-offs.

On the 23rd of February, a test of this range resulted in a 42% drop. The second instance, on the 13th of April, led to a 17% decline over just three days. Most recently, a retest on the 28th of May saw HNT fall by 46%.

Source: TradingView

This repeated pattern suggests that a move into this supply zone could trigger another sharp drop—possibly ranging between 17% and 46%, with the average decline sitting around 35%.

Investors are reducing exposure

Some investors appear to be trimming their positions in anticipation of a correction.

Over the past four days, spot market participants have sold approximately $2.17 million worth of HNT, per CoinGlass data.

This selling trend is reflected in a consistent green histogram, indicating sustained outflows. The derivatives market mirrors this behavior.

Source: CoinGlass

Open Interest has climbed 4% to $7.34 million, showing an increase in trading activity.

However, the Long-to-Short ratio favors sellers, implying that most of the $364,000 in added liquidity over the past 24 hours came from short positions.

Trading volume has declined 10% even as price rose, typically a red flag for bullish momentum. A rally without rising volume suggests the move lacks strength, raising the risk of a breakdown.

Indicators signal a pullback

Technical indicators further support the bearish case.

The Money Flow Index (MFI), which tracks liquidity inflows and outflows, has entered overbought territory—above the 80 mark.

Source: TradingView

This suggests HNT is currently overvalued and vulnerable to a correction.

Additionally, the Accumulation/Distribution (A/D) indicator remains in negative territory. This discount phase points to more selling than buying activity and hints at sustained downward pressure.

If the A/D indicator continues to stay negative, HNT could face a significant drop in the coming days.