Key Highlights
What’s Behind Helium’s Surge?
The rise in Helium’s price can be attributed to the token buyback program fees, DEX trading volume, and transfers.
Is HNT Price Set to Reverse?
If the inverted head-and-shoulders pattern holds, there is potential for HNT to reverse its price trend and move upwards.
Helium (HNT) is a prominent decentralized physical infrastructure network (dePIN) operating on the Solana (SOL) blockchain.
The altcoin has experienced a 16% increase in value over the past month, mainly due to the implementation of a buyback program on October 20th.
At present, the daily trading volume of the token has surged by 25%, reaching $17 million. The price movement of the altcoin is indicating a formation of a bottoming pattern.
However, the question remains whether the on-chain activities and fundamental factors of the token will lead to a complete reversal in its price.
HNT Fees vs. Buyback Program
An examination of Helium Network’s fee generation alongside its token buybacks reveals a discernible trend.
Since October 20th, HNT has been utilizing collected fees to repurchase its own tokens, effectively managing the circulating supply.
While these buybacks initially bolstered HNT’s price, their impact has somewhat stabilized since early November.
On average, $30,000 worth of HNT has been repurchased over the past month.
Source: Artemis
The buyback program significantly reduces the circulating supply, potentially boosting the price if it aligns with demand.
Token Transfer and DEX Volume Surge
Similarly, token transfers and DEX volumes have been on the rise. Total transfers reached $30 million recently based on Solscan data.
The token’s DEX trading volume also hit $3 million, marking the highest in the past week. The total transfers on DEXs exceeded 40K, with a parabolic trajectory since November 11th.
Sales totaled $1.32 million, slightly lower than buy orders at $1.47 million. Buyers have dominated sellers over the last week.
Source: Solscan
While on-chain and fundamental factors point towards a bullish outlook, the price action is reflecting this sentiment.
Helium Price Analysis
HNT recently experienced a minor price dip but managed to stay above the $2 support level. Instead of breaking down, it has maintained a head-and-shoulders trading range, forming a potential base.
The Bull Bear Power (BBP) indicator indicates a battle between buyers and sellers, with buyers slightly ahead at present.
To initiate a bullish breakout, HNT needs to close above the $2.74 resistance zone. Sustaining this level could lead to a move towards $4. If not, the price may continue consolidating between $2.17 and $2.74.
Source: TradingView
However, the overall cryptocurrency market is showing weakness. A breakdown below the pattern could invalidate this potential bottom.
In conclusion, HNT’s growth may be driven by the buyback program and increasing DEX volume. Nevertheless, the market’s general weakness poses a risk to this optimistic outlook.
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