Lumens (XLM) token price jumped high as the Stellar Foundation decided to burn almost half of its total XLM supply.
During the Stellar Meridian conference on Monday, November 4, the Stellar Development Foundation CEO Denelle Dixon disclosed that they have burned 55 billion Lumens (XLM) tokens which is half of the overall cryptocurrency supply.
Earlier there were a total of 105 billion tokens of which 20 billion were in circulation. With the recent burning, the total supply has reduced to only 50 billion XLM tokens. In its latest Medium blog post, the Stellar Foundation noted that token burning was part of the company’s effort to become more efficient as it moves forward. The Stellar Foundation wrote:
“SDF can be leaner and do the work it was created to do using fewer lumens. Over the years we’ve also seen that giveaways and airdrops have diminishing effects, especially in the outsized amounts our original plan was designed to support. So a smaller public-facing program would have just as much impact.”
Speaking to the attendees during the conference about the decision to burn XLM tokens, Dixon explained:
“We didn’t start by wanting to burn. We started by asking, ‘What do we need? As much as we wanted to use the lumens that we held, it was very hard to get them into the market.”
Dixon further added that instead of deciding on an arbitrary number to burn the XLM tokens, the Stellar Foundation decided to properly calibrate on the XLM tokens it can use for the next decade. The blog post mentions that the SDF will use a majority of the remaining funds to upgrade the Stellar blockchain network, create several use-cases for the XLM tokens, support network partnerships, and other things.
Stellar’s XLM Kitty And Market Reaction
After the latest burning, the SDF controls over 30 billion XLM tokens, of this, 12 billion tokens are allocated in the direct development fund which supports the growth of the organization. The Stellar Foundation has kept 10 billion XLM tokens aside to make important investments whereas 2 billion tokens are kept for the “ecosystem support”.
Popular Twitter account Whale Alert has mentioned all the massive XLM token transfers.
Speaking about how the market will react to the XLM burning decision, Dixon told CoinDesk:
“I don’t know. I really just don’t have a sense at all of what the market response is. From my standpoint, it’s how the ecosystem feels about it. We got a lot of positive response from the ecosystem because we are rightsizing what the foundation has and the foundation holds.”
But it looks like the XLM token burning has resulted in better performance of the token (+approximately 27% after the announcement). At press time, XLM is up over 14% in the last 24 hours and is currently trading at $0.078 with a market cap of $1.5 billion.
But if the growth of XLM price now is explainable, what is the growth of XRP related to? It was noted that the coin started growing just after the announcement from SDF. Though now it is trading for $0.29, after the announcement its price surged to $0.305 practically immediately (+approximately 4% within 24 hours). It is sais that such a move may be related to the upcoming Ripple Swell conference that is scheduled to take place later this week.
Stellar Poised For 50% Surge Against Bitcoin Following Supply Burn Spike
The altcoin known as Stellar (XLM) has been among the top ten list of crypto assets by market cap for some time, but has been among the least hyped of the bunch since the bear market first began in 2018.
That all may change, soon, as the crypto asset may be poised for as much as a 50% gain against Bitcoin in the coming days, according to one prominent crypto analyst.
Stellar Launchpad Ready For Over 50% Pump Against Bitcoin
Stellar (XLM) has struggled throughout the bear market to maintain any positive momentum and is one of the few crypto assets that hasn’t yet broken out of downtrend resistance dating back as far as its previous all-time high.
At the peak of the crypto hype bubble, Stellar had reached prices of nearly $1 per token, but is currently down over 90% and is trading at just under 8 cents per token.
Things appeared bleaker for Stellar, and was trading at under 5 cents per token in September, but the Stellar Foundation recently burned half of the token supply, causing a massive pump. The Stellar Foundation burned 55 million XLM tokens, resulting in a 25% surge in asset prices.
But the pump may not completely be over, and Stellar instead may be gearing up for another leg up, and one that could result in as much as a 50% gain against Bitcoin in the coming days.
According to prominent crypto analyst DonAlt, Stellar is showing signs that XLM/BTC trading pair is ready for an extremely strong move up, now that resistance has been breached, and could be targeting 1400 sats.
XLM Supply Burn Wasn’t Enough To Restore Bullish Momentum
XLM is currently trading at around 900 sats, and a move to 1400 sats would be a 55% increase from current prices. However, the increase is based on performance against Bitcoin on the XLM/BTC trading pair, and not the US dollar.
On XLM/USD charts, the crypto asset has yet to break out from downtrend resistance and could continue to be locked in a downtrend against the dollar, all while it outperforms Bitcoin. Such a move would suggest Bitcoin could suffer a dangerous drop, causing a divergence in performance next to Stellar.
Stellar is currently the 10th largest cryptocurrency by market cap, right behind Bitcoin for Bitcoin Satoshi Vision, and just ahead of Justin Sun’s Tron cryptocurrency.
Stellar remains down as much as 90% from its former all-time high price, and for the crypto asset to return to such prices, would require a 1,150% gain. XLM is just one of many altcoins that has underperformed Bitcoin by a large margin in 2019.
Stellar (XLM) retreats from weekend high, stays in green on a day-to-day basis
- Stellar (XLM) is one of the best-performing coins out of top-20.
- XLM/USD retreats from the recent high amid global sell-off on the cryptocurrency market.
Stellar (XLM) recovered from the recent low of $0.0683 to trade at $0.0815 on Sunday. By the time of writing, the coin has partially reversed the gains and settled act $0.0778; however, it still enjoys 3% of gains on a day-to-day basis.
Currently, Stellar sits on 10th place in the global cryptocurrency market rating compiled by CoinMarketCap. The coin gained over 30% during the previous week as the Stellar Foundation burned 59 million XLM tokens.
Read more details here
XLM/USD, the technical picture
On the intraday charts, the initial resistance is created by a combination of SMA50 (Simple Moving Average) and the middle line of the Bollinger Band on 4-hour chart (currently at $0.0750). We will need to see a sustainable move above this handle for the downside to gain traction with the next focus on psychological $0.0700 that coincides with SMA100 daily and an upside trendline from October 23 low at $0.0571.
Once it is out of the way, the sell-off is likely to gain traction with the next focus on $0.0667 (SMA100 daily) and $0.0650 (SMA50 daily).
On the upside, we will need to see a sustainable move above the psychological $0.0800 for the recovery to gain traction. This area is strengthened by the upper line of the Bollinger Band on 4-hour chart and closely followed by Sunday’s high of $0.0815. The next resistance comes at $0.0846 (the highest level of November 5.
XLM/USD, 4-hour chart
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Stellar Lumens (XLM) to Post Another 37 Percent Gain after Recent Pump, Crypto Trader Says
A crypto trader expects XLM to grow another 37 percent before it hits resistance, while the community is heatedly discussing the recent token burn.
On November 5, the XLM price suddenly soared 20 percent, following a token burn of 55 bln XLM. That is around 50 percent of the total supply.
The crypto community has been having heated discussions as to the reasons of this abrupt coin burn.
Still, a crypto trader going by the name @imBagsy in Twitter, says they are expecting the XLM price to surge another 37 percent before it hits the first serious level of horizontal resistance.
XRP fans are at a loss
A prominent member of the Ripple community, @XrpCenter, posted a tweet, expressing his disappointment at the situation with XLM that perhaps seems unfair to XRP holders.
After Stellar eliminated half of the total XLM supply, the price immediately soared (though no particular reasons were cited), while the price of XRP is not moving up much, despite the numerous partnerships and utility cases for XRP.
Another thing is that despite the multiple forecasts of XRP surging once the Swell event starts this year (taking place November 7 and 8) in Singapore, the price of the coin remains in the red with no signs of bulls taking over bears.
Image by Coinmarketcap
Ripple’s Swell 2019
During the much-expected conference, the CEO Brad Garlinghouse told Forbes that by now Ripple has over 300 customers.
As for the fact that many are demanding why the XRP price has not skyrocketed yet, as it was in January 2018, Garlinghouse said that the company and the XRP price are following the natural course of things – first a child crawls, then he walks, then he runs.
Garlinghouse stated that Ripple is not yet running but is already walking.
“I think the people who are focused on the hype is trying to sprint – Ripple is very much focused on the marathon. And I think we are at mile marker two of the 26 miles. We have 24 miles ahead of us.”