After weeks of bullish momentum, Helium has now succumbed to bearish pressure against the grain as the broader market has moved higher in the short term. I the latest market data shows that HNT has fallen by about 16% since last week, which has led to a change in investor sentiment.
The performance of the HNT market in the short term is due to recent developments in the Helium community regarding the upcoming Helium v3 network development. With the recent social unrest, we can see the HNT struggle to function in the short term.
A Short Primer on Helium v3
Last week, the official account of X announced the release of their Helium v3 proposal that will replace most of the old system running under the platform’s hood. According to this official blog postthe new system will include a new economic model to “empower others to join and scale effectively [us] on the Helium Network.”
However, the community focused on one of the features of Helium v3 which increases the maximum number of HNT tokens in circulation. According to the blog post, the new model will increase the total supply by using a one-time mint of 5 million HNT for the use of HST that is redeemable on the HNT that is locked after 1 year of use.
The correction of emissions is also the focus of the new economic model with 10 million HNT per year to be emitted by the network, divided equally between the sub-networks of the field. If the proposal is pushed through in its current state, the maximum supply would jump from 223 million to 238 million – about a 7% increase.
This proposed economic plan led to criticism from members of the public. One user noted that the proposal seems slow while others pointed out the inflationary methods the dev team is proposing.
“I love ideas! [But] The part I highlighted is about: how can one propose to change the future high volume of HNT? It should be permanently fixed at 230 million. Please tell me I’m reading this wrong,” said user PessimisticPokerist e answer in the post.
Since the proposal is in its early stages, the points of interest may change as the public dialogue continues.
HNT Will Return to Mid-August Levels
As members of the public criticized the early Helium v3 proposal, investors and traders felt the sentiment swing, turning HNT’s excellent start into a bearish one. As of writing, the bears are targeting $6.1 in the short term, reversing the gains made since last month.
One thing is clear: HNT’s trajectory will continue downward as the bulls lose steam. If the bears are stopped at $6.1, we may see a return to July levels, completely reversing the gains made since the beginning of the 3rd quarter of the year.
Featured image from Discovery #MINDBLOWN, chart from TradingView