Helium’s growing data revenue and token burns drive deflationary pressure, supporting HNT’s continued price rise.
- Helium’s record data revenue and increased token burns were driving bullish momentum at press time. Technical and on-chain metrics suggested room for further growth, but resistance seemed near.
Helium [HNT], priced at $8.16 at press time, recorded a 0.2% rise in the last 24 hours due to strong data revenue and higher token burning.
The increasing usage of mobile and IoT services on the Helium network has greatly affected the token supply and the price trend.
This analysis seeks to ascertain, using technical and on-chain data, if the prevailing upward trend will most likely be maintained.
What’s driving HNT’s demand?
For instance, on the 7th of September, Helium recorded its highest daily data revenue, with $4,070.14 coming from mobile and $97.05 coming from IoT services.
This has resulted in more HNT being burned, as this is how the Helium network works; data credits (DC) are created through burning HNT.
In the last 24 hours, 9.6 million DC have been burned, indicating a decrease in the number of $HNT in circulation.
Another significant achievement was captured by the founder, Amir Haleem, in an X (formerly Twitter) post, where he pointed out that token burns were increasing on a daily basis because of the growing adoption of the network.
Source: X/Amir Haleem
This is in line with the increasing network utilization that leads to higher burn rates and, therefore, the deflationary characteristics of the HNT token.
Also, 7.68% of the total HNT supply is staked at the moment, which also limits the supply in the market.
Technical indicators point to short-term strength
AMBCrypto’s look at Helium pointed to the currency’s positive direction.
The Relative Strength Index (RSI) was at 61.93 at press time, suggesting that $HNT was still below the overbought level of 70 and, therefore, has the potential to rise further.
The MACD indicator has a bullish crossover with the MACD line standing at 0.005 above the signal line, which suggests that the market remains in the upward trend.
However, the price is getting close to the upper Bollinger Band, which is $8.492.
This suggested short-term resistance, as most assets that trade near the upper Bollinger Band tend to experience increasing volatility or consolidation.
If the price cannot break through this level, there is a high possibility of pullbacks.
Source: TradingView
On-chain and sentiment contrast
Data from the blockchain supported this bullish thesis for Helium. The network numbered 357,267 active hotspots at press time, which is important as it shows the growth in the physical infrastructure provided for the decentralized wireless service.
Additionally, the number of Helium mobile subscribers as of the 9th of September was 113,250, which is the network’s real-life usage.
The network produced $4,764.25 of daily revenue on this date, mainly due to mobile and IoT usage, which remains a source of token burns and decreasing supply.
Source: Helium Explorer
The overall market perception of Helium was still bullish at press time. This was supported by the steady rise in network usage and a rising number of tokens being burned, which added to the deflationary pressure of HNT.
However, investors should not be blind to other market conditions, because, even though Helium’s fundamentals are great, but broader market conditions may affect the price of HNT even as the network grows.
Sustainability of bullish momentum
From the above analysis, we can see that Helium’s fundamentals, such as increasing data revenue, token burns, and network adoption in the short term, strongly support the bullish trend.
Making HNT a deflationary model means that the more the network is used, the fewer $HNTs are in circulation, and thus the price goes up.
The fundamental analysis has also supported the positive trend, with both the RSI and MACD also indicating positive on the technical analysis.
However, traders should monitor the resistance levels at the $8378 Bollinger Band and possible changes in the overall market mood.
Even though the current trend appears to be favorable, any major challenges or movements in the market may lead to fluctuations in the short term.
The increasing trend of the token burn rate, supported by the increasing data revenue and the active network participants, is also driving the price of $HNT higher.
However, monitoring key resistance levels and market conditions is crucial to establish whether this momentum is sustainable or if there could be short-term pullbacks.
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