HNT dips 36% from July peak — will Helium’s August 1 halving spark a rebound?

Helium’s HNT token has lost 36% of its value since hitting $4.03 in mid-July, trading at $2.95 on ahead of it’s third halving. 

The drop has extended by 12% in the past 24 hours and nearly 20% over the past week. At its current level, Helium (HNT) sits 94% below its all-time high of $54.88 set in November 2021. 

Trading volume has picked up, with $14.7 million traded in the past 24 hours, a 31.2% increase, indicating a recent uptick in activity. Derivatives data from CoinGlass shows a 15.8% rise in volume to $6.37 million, though open interest has dropped 12% to $5.96 million. This suggests that some long positions have been closed or liquidated.

Halving reduces HNT emissions but shifts reward dynamics

The latest halving, which is set to go live today, Aug. 1, is part of Helium’s long-term supply strategy. As outlined in the network’s HIP-20, Helium reduces its daily token emissions by 50% every two years.

As a result, the amount of new HNT issued each year will decrease from 15 million to 7.5 million, or slightly more than 20,500 HNT per day. Although this shift affects miner incentives, it also promotes a deflationary model that aims to achieve long-term economic balance.

Rewards across the ecosystem will be impacted by the halving in different ways. Earnings from proof-of-coverage are immediately reduced, but rewards for data transfers, which are given out according to actual usage, are unaffected.

Despite a steep decline in rewards for passive earners, this distinction may help support active Hotspot operators who contribute to mobile and IoT data flows.

Importantly, the event also ties into Helium’s governance structure, where staking and delegation play a central role. To remain eligible for network rewards, veHNT holders who lock their HNT to obtain governance power must re-delegate by August 1.

This includes designating proxies to cast votes in their behalf if they are inactive, with a growing emphasis on guiding how emissions are split between Helium’s Mobile and IoT sub-networks.

Helium technical analysis

Price action is still weak despite the halving’s long-term significance. Short-term technical indicators point to a bearish outlook. At 43, the relative strength index is still neutral but on the decline. Momentum and MACD both display sell signals, while the Stochastic %K has fallen below 6, suggesting possible oversold conditions.

Moving averages paint a more bearish picture. HNT is trading below its 10-day to 200-day EMAs, with only the 50-day simple moving average showing support. The ADX at 35 points to trend strength but no reversal as of yet, and the Awesome Oscillator is still positive but flat.

A short-term bounce is still possible if the price stays above the crucial support level around $2.85 and there is stronh buying volume. However, the halving might not be sufficient to promote a long-term recovery unless sentiment improves or usage metrics increase.