Helium [HNT] has seen a staggering 36% climb in its asset value over the past day as of writing. On a year-to-date basis, however, it is still underperforming, with a 38% loss, according to CoinGlass.
The main factor behind the recent rally has been closely linked to the protocol’s cell coverage usage across locations, including Celina, Texas, and Waimea Valley, Hawaii, where users now rely on its services to access internet connectivity.
The sentiment gauge, which measures the market outlook on a scale between -10 and 10, had a clear bullish stance with a reading of 5.6 at the time, suggesting that investors remain optimistic about the asset’s outlook.
The downside risk isn’t eliminated
The outlook from the sentiment, price, and momentum sides of the market appears bullish, but there is still a big question over whether the asset can maintain its current strength.
The perpetual market positioning for HNT suggests that the price could face a decline, as the funding rate remains highly negative. The funding rate fell to roughly -0.6954%, with about $16.94 million in positions favoring short contracts.
This implies that HNT could face a decline soon, as short-position holders continue to apply downward pressure on the price.
The liquidation heatmap analysis also shows that a potential price swing lower could push the asset toward around $0.20 on the chart.
This outlook is based on the cluster level below the current price. These clusters represent areas of unfilled orders on the chart, highlighted by the shaded regions. However, there is still a possibility of further upside, particularly toward the shaded cluster above the current price.
For now, if momentum drives the price to clear the upper cluster, the downside risk remains significant, as a reversal could eventually weigh on HNT’s price.
HNT protocol is running at a loss
DeFiLlama’s financial data for Helium shows that the protocol is operating at a loss, which does not provide a strong fundamental outlook for the asset.
At the time of writing, the losses had reached about $178,000, the lowest accumulated loss recorded so far this year. While this points to some progress, the lack of profitability could still affect investor sentiment toward the asset.
If that happens, it could put further pressure on HNT and push its price lower from its current level, weighing on the overall outlook.
The spot market has also reflected this weakness, with capital continuing to exit the market. Over the last 24 hours, netflow data shows roughly $218,000 in net outflows, representing the difference between spot inflows and outflows.
Although seller dominance has declined noticeably over the past few days, HNT still carries downside risk until spot netflow turns negative, indicating that buying activity has overtaken selling.
Final Summary
- HNT has surged 36% in 24 hours, supported by bullish market sentiment and stronger momentum across the asset.
- Negative funding, protocol losses, and spot outflows suggest HNT could face renewed selling pressure despite its recent rally.
