Will Hamster Kombat [HMSTR] break $0.01 again despite centralization risks?

• Hamster Kombat, a Web3 game tied to the HMSTR token, has seen a sharp decline in active users
• To ensure long-term consistency, it needs to address these challenges

Despite a significant drop in active users, community sentiment for the Hamster Kombat [HMSTR]  token remains overwhelmingly positive. In fact, according to data, 73% of 87,689 voters were bullish on the game, while only 27% expressed any bearish sentiments.

Adding to the optimism, daily spot trading volume skyrocketed to $5.3 billion, with perpetual trading volume hitting $4 billion. The HMSTR team also highlighted a growing user base, reporting 11 million token holders.

However, these milestones have not insulated the token from market fluctuations. Hamster Kombat posted a 5% decline in value over the past day, prompting analysts at AMBCrypto to scrutinize its long-term potential.

Hamster Kombat risks stagnation if key issues persist

Interestingly, HMSTR saw a sharp drop in active monthly users, falling from 300 million in August to 41 million in November – A decline of 86%.

On-chain data from IntoTheBlock revealed a similar decline in active addresses. It peaked at over 700,000 in late September, before dropping to just above 20,000 by mid-November.

The token’s price followed a similar trend. From its all-time high of $0.01 in mid-September, HMSTR fell to $0.0022 by Nov. However, it has shown signs of recovery since, rising to $0.004400 at the time of writing.

Source : Santiment

This bullish momentum has been fueled by Bitcoin nearing a price range deemed ‘high-risk,’ prompting investors to redistribute profits into low-cap tokens. This can position HMSTR as a promising contender.

However, community support alone won’t ensure long-term consistency. To sustain momentum, HMSTR has to offer something innovative and engaging which will be key for attracting new entrants in this increasingly competitive space.

Therefore, for Hamster Kombat to maintain momentum, the game must evolve, offering experiences to attract new players and retain its existing base. 

Without addressing its user retention challenges, the project risks stagnation in an increasingly competitive Web3 gaming space.

Incentives needed to retain its existing user base

Another report by AMBCrypto highlighted a significant concentration of HMSTR tokens among whales, with 11 whales holding approximately 85% of Hamster Kombat’s total supply.

As a result, monitoring their activity will be crucial for HMSTR’s long-term success. Recently, there has been a noticeable decline in accumulation, with only two instances where whales aggressively purchased HMSTR.

Source : IntoTheBlock

In both cases, this activity coincided with Bitcoin recording a bull run. These instances provided a major incentive for whales, while helping Hamster Kombat rebound from a slump and break the $0.004 resistance.

Read Hamster Kombat’s [HMSTR] Price Prediction 2024-25

While this is a bullish sign, it also highlighted the centralization of Hamster Kombat. This makes it vulnerable to sharp price swings if these whales decide to offload a significant portion of their HMSTR tokens.

So, unless the network retains retail interest and prevents further drops in active users, it will be challenging for Hamster Kombat to target a parabolic run back to $0.01. For now, short-term gains driven by Bitcoin’s bull rally appear to be more likely.