After weeks of continued bullishness, Helium has now succumbed to the bearish pressure going against the grain as the broader market skyrockets in the short term. The latest market data shows that HNT fell by nearly 16% since last week, leading to a flip in investor sentiment.
HNT’s market performance in the short term is largely due to a recent development in the Helium community concerning the upcoming Helium v3 network upgrade. With the recent community uproar, we might see HNT struggle to perform in the short term.
A Short Primer On Helium v3
Last week, the official X account announced the release of their Helium v3 proposal that will change much of the old system that runs under the hood of the platform. According to the official blog post, the new system will include a new economic model to “empower others to join and successfully scale with [us] on the Helium Network.”
However, the community focused on one of the aspects of Helium v3 which increases the maximum number of HNT tokens in circulations. According to the blog post, the new model will increase the total supply through a one-time mint of 5 million HNT for HST redemption that is redeemable for locked HNT after 1 year of implementation.
Emission adjustments are also a core focus of the new economic model with an annual 10 million HNT to be emitted by the network, split equally between the subnetworks of the platform. If the proposal is pushed through in its current state, the maximum supply will jump from 223 million to 238 million- nearly a 7% increase.
This proposed economic system led to criticism from community members. One user noted that the proposal seems like a slow rug while some pointed out the inflationary measures the dev team is proposing.
“I love the ideas! [But] This part I highlighted is concerning: how can anyone propose changing the max future supply of HNT? It should be fixed forever at 230 million. Please tell me I’m reading this incorrectly,” said user PessimisticPokerist in a reply to the post.
Since the proposal is in its early stages, the current points of interest might change as community dialogue progresses.
HNT To Return To Mid-August Levels
With community members criticizing the early proposal for Helium v3, investors and traders have sensed a flip in sentiment, turning the overwhelmingly bullish start for HNT 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 to point downward as the bulls lose steam. If the bears are not stopped on $6.1, we might see a return to the July levels, completely reversing gains made since the start of the 3rd quarter of the year.
Featured image from Discovery #MINDBLOWN, chart from TradingView