How Helium's Buyback Program May Propel HNT Towards $4

Helium is witnessing a resurgence in its HNT token price due to a token buyback program initiated on October 20. This program aims to manage the token's circulating supply and may provide a much-needed boost to its value. However, broader market conditions could impact its price trajectory.

Key Takeaways

The Helium token's price is influenced by the fees from its buyback program, trading volume on decentralized exchanges (DEX), and overall transfers.
If the current inverted heads-and-shoulders pattern holds, HNT could experience an upward price movement and improve its structural outlook.
Helium (HNT) is a prominent decentralized physical infrastructure network (dePIN) operating on the Solana (SOL) blockchain.
In the last month, HNT's value has increased by over 16%, largely due to its buyback initiative that started on October 20.
The daily trade volume has seen a modest rise of 25%, reaching $17 million at the time of reporting, with the price displaying a potential recovery pattern.
The effectiveness of on-chain activities and token fundamentals could determine price reversals for HNT.

Helium's buyback program

HNT Fees and Buyback Program

An examination of Helium Network's fee income alongside its token buyback actions reveals notable trends. Since the launch of its buyback program on October 20, HNT has utilized collected fees to repurchase its own tokens, effectively managing its circulating supply. While these buybacks initially fueled an increase in HNT's price, the effect has stabilized since early November. In the month that followed, an average of $30,000 worth of HNT tokens were repurchased.

HNT Buyback

Source: Artemis

The buyback initiative significantly lowers the circulating supply, potentially increasing the price if demand rises correspondingly.

Surge in Token Transfers and DEX Volume

In addition to the buyback effects, token transfers and DEX trading volume have also seen significant growth. The total token transfer reached $30 million the previous day, according to data from Solscan. Furthermore, DEX trading volume reached $3 million, marking the highest level in the past week. Over 40,000 token transfers occurred on DEXs, with growth accelerating since November 11.

The total value of sales was $1.32 million compared to buy orders totaling $1.47 million, indicating that buyers have dominated over the past week.

DEX Transactions

Source: Solscan

Although on-chain metrics and fundamental indicators signal a potentially optimistic outlook, the price action is also reflecting this trend.

Analysis of Helium's Price Action

HNT has experienced a brief drop in price but has remained above the crucial $2 support level. Instead of declining further, it has established a trading range resembling a head-and-shoulders pattern, which could indicate a base forming.

The Bull Bear Power (BBP) indicator reflects a competitive scenario between buyers and sellers, with buyers slightly leading at the time of writing. For HNT to break out bullishly, it needs to close above the $2.74 resistance zone. Maintaining that level could facilitate a rise toward $4; otherwise, the price may continue consolidating within a range between $2.17 and $2.74.

Helium Price Chart

Source: TradingView

However, the cryptocurrency market as a whole appears weak. A significant decline below the established trading pattern could invalidate this potential bullish scenario.

In conclusion, HNT stands to benefit from its buyback program and increasing DEX trading volume. Yet, broader market weakness raises concerns regarding the continuation of this bullish trend.