On November 4, the Stellar news showed that XLM announced a completion of a 50% token burn of the total supply, leading to the destruction of 55 billion XLM tokens. The Stellar Development Foundation explained that this token burn will provoke efficiency within the Stellar ecosystem – but will the Stellar XLM price jump as a result of it?
This is the biggest question that analysts have right now. We previously saw the price of XLM surging by 25% after the announcement triggered the market to become bullish on the altcoin. Knowing that a growing number of altcoins are starting to produce big returns, analysts are questioning themselves and asking if the XLM price could mimic these moves.
So, will the Stellar XLM burn produce new gains?
As it stands, Stellar (XLM) is trading at $0.08 with 1.10% gains in the past couple of hours. However, the weekly timeframe shows that a full retrace since December 2017s high of $1.10 to the May 2017 high at $0.05 is possible. Over the past few months, the current level held as support and the area appears to be a new springboard supporting XLM and its upward movement.
The reality, however, is that the altcoin is still in a 23-month downturn which comes ever since its 2017 peak. On the question “will the Stellar XLM burn trigger new increases,” we need to say that XLM first needs to break the 23-month downtrend to the upside and start creating higher highs and higher lows on higher time frames. This would signal that the situation is starting to change – even on the smaller timeframe.
As XLM surged, the daily candle also posted an all-time high volume candle on exchanges. This is what caused the price of XLM to break through an important resistance at $0.07 and the price pushed further in the range high at $0.09.
For a sustainable continuation on the upward trend, a retest should occur at the $0.073 area in order to confirm the support that Stellar (XLM) has in the current zone. For now, the range high for Stellar’s Lumens (XLM) coin is at $0.13 – something that needs to be secured in order for a bullish run in the future.
It is yet to be seen whether XLM has the potential to replicate the previous market conditions.
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