Humanity Protocol [H] saw a 15% rally in the hours of the 29th of December. This move saw the token’s Open Interest (OI) rise from $48.5 million to $57.5 million, a sign of strong speculative interest.
Yet, H was unable to sustain its bullish momentum and retested the $0.16 support level once again. The token has traded within a range over the past week, and this range could give traders opportunities.
Assessing Humanity Protocol’s long-term trend
A recent AMBCrypto report highlighted the surge in trading volume and OI recently. While this was a classic bullish signal, it faced a threat from the upcoming token unlock.
Tokenomist data showed that a 105.35 million H unlock, worth $17.56 million, is scheduled for the 25th of January. This is part of a monthly unlock that could add to short-term selling pressure on H and impact bullish trends.
Source: H/USDT on TradingView
The 1-day structure was bullish at last, following the strong recovery the token made in December. The RSI’s reading of 60 showed momentum was strong, but not overbought yet.
The OBV was closing in on a local high to reflect increased buying pressure.
At the same time, swing traders should remember that there is a chance for a price drop to the Fibonacci retracement levels at $0.112 and $0.083.
Should H traders expect a bullish trend now?
The monthly token unlocks do not translate into heavy, immediate selling pressure. The 105 million H token unlock need not be immediately sold, but it was still a sizeable long-term obstacle to price trends. The unlock on the 25th of December was absorbed, hinting at demand for H.
CoinMarketCap data showed that only 23% of the total supply was in circulation now. Investors should expect dilution over time and prepare accordingly.
In the coming weeks, a bullish trend is possible, but it might be preceded by a retest of the Fibonacci retracement levels at $0.112 and $0.083.
Wait for a breakout from THIS range
Source: H/USDT on TradingView
H was trading within a range from $0.15-$0.18 over the past week. The range extremes could give lower timeframe traders an opportunity to enter the market. A move beyond $0.18 would offer a buying opportunity.
On the other hand, a breakdown below $0.15 would be a warning of bearish dominance.
Final Thoughts
- The monthly token unlocks are expected to be an obstacle to price appreciation, but increased demand can outweigh the effects of dilution.
- It is unclear if the demand for H will continue to grow. For now, traders can monitor H bulls’ attempts to overcome the $0.18 local resistance.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
Source: https://ambcrypto.com/humanity-protocol-rallies-15-but-can-demand-outrun-token-dilution/
