Helium's HNT Drops 14.07% in 24 Hours Amid Declining On-Chain Activity

Helium, a decentralized wireless network, has experienced a significant decline in its native token, HNT, over the past three months. The token has plummeted by 79%, reaching a yearly low of $2.1. This downward trend has been consistent, with HNT trading within a descending channel since hitting a local high of $10 three months ago. As of the latest data, HNT was trading at $2.59, reflecting a 14.07% decline in the past 24 hours, and a 24.17% and 24.45% drop on weekly and monthly charts, respectively.

The decline in HNT's price is closely linked to a decrease in on-chain activity. Over the past few months, Helium's daily active addresses have dropped from 19.1k to a one-year low of 4.9k. This substantial decrease in active addresses indicates a low demand for the altcoin and a reduced adoption rate. Consequently, the network is experiencing lower usage, either due to new investors shying away from the network or existing users closing their accounts. This trend reflects strong bearish sentiments in the market.

The reduced demand for HNT is further evidenced by a decline in daily transactions, which have also reached a yearly low of 18k. This dip suggests that fewer traders are interacting with the network, a common occurrence during market downturns as investors adopt a risk-off approach. Additionally, the past 24 hours saw HNT's market cap drop to a yearly low, further validating the reduced demand. With lower demand, there is less capital inflow as investors are not buying, resulting in a lower market cap, especially as prices also decline. The massive dip in on-chain activity positions Helium in a risky place where it could drop even further.

Given the current market conditions, the future of HNT remains uncertain. With HNT hitting a yearly low of $2.1, the altcoin faces significant challenges. If sellers continue to dominate the market, we could see more losses on HNT. The past day saw a bearish crossover on the Relative Strength Index (RSI), validating the previous bearish crossover on the Stochastic Oscillator, thus confirming the potential for a trend continuation. If this trend persists, HNT could drop below $2 for the first time since November 2023.