As a seasoned crypto investor with a knack for navigating the turbulent waters of the digital asset market, I’ve seen my fair share of ups and downs, bull runs, and bear markets. The recent plunge in HNT’s price has caught my attention, primarily due to the growing unrest within the Helium community over the proposed Helium v3 upgrade.
After several weeks of continuous growth, the native token of Helium, HNT, has experienced a significant drop, declining approximately 15% in the last seven days.
“The main reason for HNT’s decrease is increasing dissatisfaction within the Helium network regarding the recently suggested Helium version 3 update.
Helium v3 Proposal Faces Criticism
The Helium v3 proposal was recently introduced via the project’s official X (formerly Twitter) account. The upgrade aims to revamp Helium’s economic model and improve scalability, making it easier for new participants to join the decentralized wireless infrastructure network.
However, the proposal’s bid to increase the maximum supply of HNT tokens has sparked community backlash. Under the new model, Helium would mint 5 million HNT tokens in a one-time event, allowing for the redemption of Helium Subnet Tokens (HST) after one year. Additionally, the new structure would allow the network to emit 10 million HNT annually, split evenly across its subnetworks. If the proposal is approved as it stands, HNT’s total supply would rise from 223 million to 238 million, marking a 7% increase.
This potential increase in supply has raised concerns within the community, with many fearing that the move could dilute the token’s value. “I love the ideas! [But] this part I highlighted is concerning: how can anyone propose changing the maximum future supply of HNT? It should be fixed forever at 230 million,” commented one user, reflecting the sentiments of many who see the proposal as a risk to the token’s stability.
HNT’s Market Struggles
Unfortunately, the timing of this dispute couldn’t be less favorable for HNT. As the overall market experiences a surge, HNT has gone against the grain, experiencing a sharp downturn. The token’s value plummeted to $6.52, its lowest point this month – a considerable drop from its multi-month peak of more than $8 that it reached earlier due to increased enthusiasm in the decentralized physical infrastructure network (DePIN) sector.
In simpler terms, the technical analysis suggests that HNT might be headed downward based on certain indicators. One of these indicators is the Relative Strength Index (RSI), which has been gradually decreasing. This decrease indicates a weakening trend in momentum. At present, the RSI stands at 41, not quite in the oversold zone yet but still hinting at persistent selling activity. If the downward trend persists, $6 could serve as the next significant support level. Should this level be breached, experts predict that HNT may slide further to approximately $5.47, potentially reversing its gains since mid-July.
Although the Helium v3 plan is currently in development and might change due to community input, the present state of uncertainty has influenced traders’ attitudes towards HNT. Now, many are placing short trades on HNT, anticipating more price declines. For the time being, the Helium team needs to address the concerns of their community if they aim to rebuild trust and improve HNT’s market performance.
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2024-09-19 12:06