How Helium’s buyback program could push HNT towards $4

Key Takeaways

What’s driving Helium?

The price of Helium was driven by the token buyback program’s fees, DEX trading volume, and transfers.

Will HNT price reverse?

If the inverted heads-and-shoulders pattern held, HNT could revert to the upside, shifting the structural outlook.

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Helium [HNT] is one of the leading decentralized physical infrastructure networks (dePIN) on the Solana [SOL] blockchain.

The altcoin has risen more than 16% in the past month, thanks to its buyback program that rolled out on the 20th of October.

The daily volume of the token spiked by only 25%, clocking $17 million, at press time. The price action of the altcoin is forming a bottoming pattern.

However, will the on-chain activity and fundamentals of the token enable a complete reversal in its price?

HNT fees vs. buyback program

Analyzing the Helium Network’s fee generation alongside its token buybacks reveals a clear trend.

Since the 20th of October, HNT has been using collected fees to repurchase its own tokens, effectively managing the circulating supply.

While these buybacks initially boosted HNT’s price, the impact has leveled off since early November.

Over the past month, an average of $30,000 worth of HNT has been repurchased.

The buyback program significantly reduces the circulating supply, potentially boosting price if it aligns with demand.

Token transfer and DEX volume surge

Similarly, the token transfer and DEX volumes were also on the rise. The total transfer hit the $30 million mark on the previous day, as per Solscan data.

The token’s DEX trading volume also hit $3 million, which was the highest in the past week. The total transfers on DEXs exceeded 40K, with the trajectory being parabolic since November 11th.

The total for sales was $1.32 million, compared to $1.47 million for buy orders. Buyside has overpowered sellside for the last week.

While on-chain and fundamental factors were pointing toward a bullish outlook, the price action was aligning with them.

Helium price action analysis

HNT experienced a brief price dip but held firm above the $2 support level. Instead of breaking down, it remained within a developing head-and-shoulders trading range, forming a potential base.

The Bull Bear Power (BBP) indicator showed a tug-of-war between buyers and sellers, with buyers slightly leading at the time of writing.

For a bullish breakout, HNT needs to close above the $2.74 resistance zone. Sustaining that level could pave the way toward a move to $4. If not, the price may continue consolidating between $2.17 and $2.74.

However, the markets were weak in the cryptocurrency sector. An effortless invalidation, a breakdown below the pattern, would disapprove this potential bottom.

In summary, HNT could be powered by the buyback program together with increasing DEX volume. Still, the general market weakness posed a risk to this bullish sentiment.