After a sharp price drop over the past week, Hamster Kombat (HMSTR) is edging toward a potentially critical technical level. Despite approaching the oversold zone, momentum indicators and on-chain data suggest that a strong recovery is far from guaranteed. As traders grow cautious, the altcoin appears set for a period of consolidation—if not further decline.
This article explores the latest price movements, technical signals, and possible short-term outcomes for HMSTR.
Bearish Streak Continues Amid Market Fatigue
Since Sunday, May 11, HMSTR has recorded five consecutive red daily candlesticks, falling from a local high of $0.0029 to $0.0024. This 17% decline reflects waning investor interest after a brief rally, pushing the altcoin closer to what analysts consider oversold territory.
HMSTR/USDT Daily Chart | Credit: TradingView
The Relative Strength Index (RSI)—a key momentum indicator—has dropped from 65.78 on May 10 to 38.10 at the time of writing. While not technically oversold (a level below 30), the steep drop hints at rapidly falling bullish momentum. The RSI’s trajectory typically signals whether an asset is likely to reverse, but in this case, a rebound still seems elusive.
Former Bullish Channel Broken
From February 27 to May 10, HMSTR traded inside an ascending parallel channel, a pattern typically associated with steady uptrends. During this time, the price climbed from $0.0016 to $0.0028, a 75% increase. However, the recent downturn has shattered both the upper and lower boundaries of this bullish formation.
According to CCN, the breakdown was triggered by declining buying momentum, which has drained optimism from the market. With the price now below the channel, HMSTR is in a structurally weaker position, and the lack of a clear trend direction suggests further downside risk or horizontal movement.
This breakdown undermines the bullish structure and opens the door for a phase of price consolidation rather than an immediate reversal.
Support and Resistance Levels Define the Next Move
On-chain analysis via the In/Out of Money Around Price (IOMAP) model reveals a delicate balance between profit-taking zones and loss-heavy resistance levels.
Support Zone: Around $0.0023, nearly 7 billion HMSTR tokens are currently in profit. This creates a psychological floor as holders may be less inclined to sell at or below this level.
HMSTR In/Out of Money Around Price | Credit: IntoTheBlock
Resistance Zone: Near $0.0028, over 4 billion tokens are at a loss. Traders holding at this level may be eager to exit positions once the price nears break-even, putting downward pressure on any upward move.
With both zones firmly established, HMSTR is likely to consolidate between $0.0023 and $0.0028 in the near term. A break below $0.0023 could trigger a sharper decline, while a strong push above $0.0028 might revive bullish sentiment.
Technical Indicators Point to Further Pressure
Zooming into the 4-hour HMSTR/USDT chart, several indicators highlight growing bearish sentiment:
The Supertrend indicator’s red line now sits above the current price, signaling a bearish trend and placing stronger resistance above.
The Chaikin Money Flow (CMF) has dropped below zero, showing that selling pressure outweighs buying interest. This is a key warning sign, particularly if the trend continues over the next few sessions.
Unless the CMF rebounds into positive territory—indicating rising capital inflow—the price may drop toward $0.0021. If the downtrend accelerates, a retest of the $0.0019 level is possible, especially if broader market conditions remain weak.
Outlook: Sideways Chop or Deeper Decline?
Despite nearing the oversold RSI threshold, HMSTR lacks strong signals for a quick turnaround. With both momentum and volume indicators leaning bearish, the most likely short-term outcome is a sideways consolidation range between $0.0023 and $0.0028.
HMSTR/USDT Daily Chart | Credit: TradingView
For any meaningful recovery, traders should watch for:
RSI approaching or dropping below 30, which could trigger oversold buying.
CMF climbing above 0, indicating renewed demand.
A clear breakout above $0.0028, reestablishing bullish intent.
Until then, trend clarity remains elusive, and cautious positioning is advised. In the worst-case scenario, breaching the support zone could see the price fall as low as $0.0019, erasing much of the year’s gains.
