Humanity Protocol has continued its remarkable recovery after successfully rebounding from a $0.04 slip. In fact, H rallied 50% from $0.14 to a monthly high of $0.21, then retraced to $0.17 at press time.
Over the same period, its trading volume surged 121% to $215 million, while its market cap reached a high of $473 million. What triggered this volatility?
Humanity Protocol sees recovering demand
After the upward momentum strengthened, buyers continued to defend higher levels. As such, Humanity Protocol experienced strong demand across the Spot and Futures markets.
On the Futures side, Humanity Protocol’s Open interest surged 31% to a monthly high of $127 million.
Equally, the altcoin’s Derivatives Volume jumped 216.68% to $1.26 billion, reflecting increased participation in the Futures market.
Source: CoinGlass
Amid increased activity, significant capital flowed into Futures, with inflows jumping to $492.35 million from $484.82 million. As a result, Futures Netflow surged 501.54% to $7.54 million, reflecting buyers’ dominance.
On the Spot side, the altcoin’s exchange outflows jumped to $15.67 million, up from $14.65 million. As a result, H’s Spot Netflow dropped 86% to -$1.02 million, a clear sign of aggressive Spot accumulation.
Source: CoinGlass
Often, rising buying pressure increases scarcity, which accelerates upward pressure – a precursor to higher prices.
H unlock risks erasing gains
While Humanity Protocol pumped to a monthly high, the altcoin could face immediate pressure from upcoming cliff unlocks.
According to Tokenomist, H leads the crypto market with anticipated cliff token unlocks between the 22nd to the 29th of December. As such, 105 million H tokens worth $15.29 million will be unlocked by the 25th of December.
Source: Tokenomist
With such a significant release hitting the market, Humanity Protocol will feel short-term pressure, which could cause a price decline.
Usually, unlocked tokens increase the supply available for immediate sale, which puts downward pressure if prevailing demand fails to absorb them.
Can the momentum hold?
Humanity Protocol rebounded as buyers across Spot and Futures markets stepped in to pursue the rally. As a result, the altcoin’s Relative Strength Index (RSI) jumped to 74 and then fell to 63 at press time.
Such fluctuations in its RSI signalled a stiff competition between buyers and sellers, as they sought market control.
Likewise, its Directional Movement Index (DMI) fluctuated between 44 and 37 at press time, further underscoring the intense battle for market control.
Source: TradingView
These show that the next move for H solely depends on which side overruns the other and regains total control.
If bulls maintain momentum and see increased new positions, H could reclaim $0.2 and target $0.27, with $0.3 as the upper resistance.
However, if sellers take the market, while token unlocks lead to higher downward pressure, the token could crash to $0.12, with $0.10 as critical support.
Final Thoughts
- H surged 50% to a monthly high of $0.21, then retraced to $0.17 at press time.
- Humanity Protocol leads with 105 million tokens worth $15.29 million in expected unlocks.
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