Helium (HNT) is currently experiencing a significant downturn, raising concerns that its value could dip below the critical threshold of $6. Recent market indicators suggest that sellers are gaining strength, potentially leading to further losses for HNT holders.

Recent Market Activity

As of September 19, 2024, HNT has extended its losses amidst intensified selling pressure. After failing to maintain support at $6.70, the token is at risk of entering a steeper decline. At the time of writing, HNT traded at approximately $6.52, marking its lowest price so far this month. This downturn follows a brief rally that saw the cryptocurrency rise above $8 earlier in September.

The surge earlier this month was fueled by growth in the decentralized physical infrastructure network (DePIN) sector, which has seen its market capitalization soar past $17 billion, according to Coingecko. However, traders who bought into this recent rally are now cashing in on profits, contributing to the downward pressure on HNT.

Technical Indicators Suggest Further Declines

Analyzing the one-day chart for HNT reveals a troubling trend. The Awesome Oscillator (AO) has turned negative for the first time since mid-July, signaling that sellers are gaining momentum. This shift in momentum is critical for traders to monitor, as it often precedes further declines in price.

Key Levels to Watch

The immediate concern for HNT investors is its loss of the 0.618 Fibonacci level at $6.70, which has historically served as a strong support level. If HNT fails to maintain its current price, it could see a decline towards $5.47. This potential drop is further backed by the Relative Strength Index (RSI), which currently stands at 41. Although not yet in the oversold territory, the RSI has been making lower lows, indicating persistent bearish momentum.

Market Sentiment Turns Bearish

On-chain data is also painting a gloomy picture for HNT. Recent reports from Artemis show that daily active addresses on the Helium network have fallen to 15,700, the lowest figure for the month. This decrease in user engagement can be a red flag for potential investors, suggesting waning interest in the cryptocurrency.

Interestingly, despite the drop in active addresses, daily trading volumes have surged. On September 17, the trading volume increased by $5 million, reaching a total of $17 million. While higher trading volumes typically indicate increased interest, the absence of price appreciation alongside this rise suggests that the market is dominated by sellers rather than buyers.

Short Selling Gains Traction

Data from Coinglass reinforces the bearish outlook. The long/short ratio has plummeted to a record low of 0.74, indicating that many traders are anticipating further declines in HNT’s price. This sentiment could lead to a self-fulfilling prophecy, where more traders take short positions, exacerbating the downward pressure on the token.

What Lies Ahead for HNT Investors?

The recent technical indicators, on-chain data, and market sentiment collectively suggest a challenging landscape for Helium investors. With ongoing selling pressure and bearish formations evident in the charts, the question remains: will HNT drop below $6?

For those invested in HNT, it may be prudent to keep a close eye on upcoming market trends. If buyers fail to step in and bolster the price, HNT could indeed breach that critical $6 mark, leading to further losses.

Conclusion

As the cryptocurrency market continues to evolve, keeping informed about the latest trends and indicators is crucial for investors. The current situation for Helium (HNT) highlights the importance of monitoring both technical indicators and market sentiment. With bearish signals emerging from various fronts, investors should be prepared for potential volatility in the days ahead.

While the DePIN sector’s growth offers a glimmer of hope, the immediate challenges facing HNT cannot be overlooked. As always, caution and thorough research should guide investment decisions in this unpredictable market.