ambcrypto.com
Humanity Protocol [H] rallied more than 15% in the past 24 hours, but its weekly gains are in the red. That is, H has lost more than 23% of its market cap in the past week.
However, traders should be wary of how long this rally will last amid an upcoming token unlock. Here is what pushed the altcoin higher and whether the trend can hold.
Why is Humanity Protocol trending up?
Looking at Arkham data, it was clear that capital was moving from exchanges to personal wallets. For instance, an insider transferred more than 107.64 million H tokens, worth over $7 million, from the KuCoin exchange to two external wallets in four batches.
Over the past 45 days, deposits on the KuCoin exchange have remained flat, while withdrawals have risen. Notably, withdrawals have surged from $4 million to $7.30 million since the 20th of August.
Additionally, mindshare jumped by more than 30% in the wake of today, as per CoinMarketCap. That is, mentions and engagements from top influencers surpassed 1.05K at the time of the press.
Altogether, the two contributed to a spike in trading activity, which in turn pushed its price up.
H breaks above a slanting trendline resistance
On the charts, H had broken above a descending trendline resistance, a market structure shift in the short term. The altcoin’s price then surged to around $0.07272, leaving a buy-side liquidity of about $32 million.
During its downtrend, H was clearing sell-side liquidity and turned on that of buyers. Its ultimate liquidity of more than $55 million sat around $0.09, where price had a triple top.
However, buyer strength has decreased, with the price of H dropping from $0.07272 to $0.06556. This change is evident when looking at the size of the bars of Bull Bear Power (BBP), which flipped red on the hourly timeframe.
Looking ahead, H may plunge to the breakout zone at $0.060 for a retest. If this zone holds, H bulls could target prices above $0.090 with short-term hurdles around $0.075, $0.080, and $0.085.
Still, the breakout level may not hold as support. Thus, this rally may soon come to an end.
Why may the rally be short-lived?
This scenario could be true, as Humanity Protocol is set for a massive unlock of 269.74 million tokens worth $17.50 million on the 25th of September. This amount is equivalent to 2.70% of the total supply.
The allocation is split across contributors, investors, and ecosystem programs. Tokenomics matter a lot, as supply can change the coin’s price outlook. Usually, unlocks create selling pressure.
Therefore, this unlock could hinder the continuation of this altcoin breakout.
Final Summary
- Humanity Protocol rallied over 15% in the past 24 hours amid exchange withdrawals and a surge in sentiment.
- H broke above a slanting resistance, shifting the market structure to bullish, but selling pressure from token unlocks could derail continuation.