DePIN Pioneers Helium and Filecoin Face Market Struggles
The future looks uncertain for the decentralized physical infrastructure network (DePIN) leaders, Helium (HNT) and Filecoin (FIL), as anxiety returns to the cryptocurrency market. Both tokens are hovering at crucial support levels that have historically been significant, and a drop below these thresholds could lead to severe consequences. The once-promising narrative of creating tangible crypto infrastructure is now under scrutiny, challenged by a fragile global economy and inherent issues specific to each project that are pressuring their valuations.
Challenges in Transitioning from Hype to Profit
The initial excitement surrounding DePIN, which leveraged crypto incentives for services ranging from mobile connectivity to cloud storage, attracted substantial investment and attention over the past year. However, the shift from mere hype to establishing a viable business model is proving to be a daunting challenge. For Helium and Filecoin, the struggle is clearly reflected in their declining price trends.
Helium (HNT) – Critical Support Zone
Helium’s price chart reveals a prolonged and challenging descent toward a pivotal support area. Technical analysts are closely monitoring this situation, as the next movement may determine the price trend for the coming months. The critical zone lies between $3.10 and $3.20, which has previously acted as a robust support level multiple times. A decisive drop below this range could trigger a wave of stop-loss orders. Should this support fail, buyers may find their next opportunity around the $2.80 mark. For HNT to recover, it needs to reclaim the psychological threshold of $4, which could restore confidence among investors.
Discrepancy Between Growth and Demand
Despite Helium’s impressive physical expansion, the economic performance tells a different story. On the surface, things appear promising: the number of active hotspots has surged past 375,000 since the project transitioned to the Solana blockchain. Partnerships with major companies, including AT&T and Telefónica, enhance its visibility, as they utilize the network to fill coverage gaps. Additionally, Helium Mobile’s growing user base burns more HNT for network credits. However, the crux of the issue lies in the actual usage of the network. Demand for data transfers has not reached the anticipated levels, and a significant portion of the fees (which lead to HNT being burned) comes from onboarding new hotspots rather than a vibrant economy of devices actively transmitting data. This imbalance raises concerns about the sustainability of the network’s model.
Filecoin (FIL) – Vulnerabilities Emerge
Filecoin, a major player in decentralized storage, is also facing significant challenges. The token is testing a price floor that has remained stable for several years, and a breach of this level could have dire repercussions. The critical range for FIL lies between $2.30 and $2.75, and a weekly close beneath this range would undermine the bullish outlook for many long-term investors. If the price drops further, the bears may target the $1.96 to $2.00 region. To reverse the current trend, FIL must regain the $2.75 to $3.25 area, which has shifted from being a support level to a resistance ceiling.
Filecoin’s Strategic Reinvention
Internally, Filecoin is attempting a transformation with the introduction of the Filecoin Virtual Machine (FVM), which was meant to enable developers to create decentralized finance (DeFi) applications and smart contracts utilizing its storage capacity. This strategic shift aims to position Filecoin as a primary storage solution for AI and Web3 applications, and the project has even partnered with significant ecosystems like Solana. However, despite these advancements, Filecoin struggles with persistent inflation. The network continuously generates new FIL tokens to compensate storage providers, leading to ongoing sell pressure. For the price to rise, the growth in demand for storage and block space must outpace the influx of new supply. Although the FVM aims to enhance FIL’s utility, the market response thus far has been underwhelming.
A Reality Check for the DePIN Sector
The current predicaments faced by HNT and FIL serve as a wake-up call for the entire DePIN sector. The aspiration to create a decentralized hardware ecosystem is compelling, but aspirations alone do not cover operational expenses. These projects are now tasked with validating their economic models in an increasingly competitive landscape. Helium contends with privacy-centric competitors like Pollen Mobile, while Filecoin is engaged in a multifaceted battle against alternatives such as Arweave and Storj, which cater to corporate clients. Compounding these challenges is a broader market environment that shows little tolerance for high-risk technology investments. In a climate of elevated interest rates and market uncertainty, investors are retreating from speculative assets. For tokens like HNT and FIL, mere existence is insufficient; they must demonstrate the ability to generate consistent and reliable revenue to endure. Ultimately, both projects face a critical juncture: either establish real, sustainable demand or risk further declines in their market positions. Traders are anxiously awaiting signs of a potential rebound, yet a downturn could trigger a new wave of selling pressure that impacts the entire sector.
