Stellar (XLM) has not stopped from crashing in spite of the company’s recent burn of 55 billion XLM tokens.
The token has faced a hard price crash recently and its price has started to move toward bearish zone. XLM is constantly facing such kind of price crashes since its recent burn of 55 billion.
Recently, the Stellar Development Foundation (SDF) burned an amount worth of 55 billion XLM tokens which was almost half of its total supply. The company burned these tokens in order to move forward. This resulted in the price surge of the coin and the price of the coin increased by 25%.
Stellar had a huge bullish move after the announcement of the burning of 55 billion XLM coins, half of the total supply. Naturally, the price went up really fast and XLM experienced a nice surge from $0.06745 up to $0.0887, unfortunately, this only lasted a week.
After hearing the announcement of the burning of tokens, the price went up very fast and saw a price surge from $0.06745 to $0.0887.
But XLM could not sustain such performance more than a week and the price went down at $0.068. But after that, it soon recovered itself and again reached $0.0827.
Stellar has been showing a downtrend after that and has faced a loss of 7% within the duration of one day. XLM’s bullish behavior has started to lose all of its support levels. And it seems that it is moving toward the bearish zone.
XLM saw an initial dump down to $0.068 but was able to recover back up to $0.0827 when the real crash started. XLM has been in a downtrend ever since and has seen a 7% loss just today. The volume hasn’t been significant but the bulls lost pretty much all-important support levels and the digital currency is currently in a heavy downfall.
It is thought that this recent XLM price drop was caused by a recent SDF transaction. The Stellar Development Foundation transferred an amount of 50 million XLM to the Kraken account.
The reactions on Twitter were mostly negative as most people see this as developers dumping their XLM coins. Although this is certainly a big transaction, it’s not necessarily as big as it seems when we take in count XLM has a current market cap of around $1.32 billion.
It’s also important to note that the SDF (Stellar Development Foundation) purpose was to help the Stellar platform achieve the global payments standard and selling those coins might be viewed as dumping but could be a necessary step.
Most of the people considered as a step by developers to dump their XLM tokens. It can also be seen in the view that SDF would sell these coins in order to get the global payment standard for the Stellar platform. But the important point to consider here is that this transaction has caused the XLM price drop.
The last day has been in the favor of bears which show that price is still moving toward bearish zone. But it is hoped that XLM price will soon recover itself from this price loss.
As previously mentioned, the bearish volume hasn’t been too significant which means not a lot of people are actually selling their XLM coins but it also seems that not many investors are willing to buy XLM back either
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