The Stellar Foundation announced yesterday the burn of 55.5 billion lumens. According to the Medium post, those 55.5 billion coins weren’t going to increase the adoption of Stellar and the foundation will only keep what they confidently believe can actually work. The SDF also stated that they will not burn any additional lumens as the current number of XLM coins aligns better with their mission.
The price of XLM reacted to the news by pumping XLM up to $0.0793 from $0.06745 yesterday, a 15% price increase. The digital currency saw a similar boost today going from $0.0785 up to $0.0887 before slipping down to $0.0841.
Today’s volume has been pretty significant and XLM is still currently in a daily uptrend. The bulls weren’t able to maintain XLM above $0.088, however, it doesn’t necessarily mean that we won’t see XLM break above the recent high within the next 24 hours.
The bulls clearly have a lot of strength right now and technically a burn of 50% of the total supply should mean that each XLM coin is worth double now. Can we see XLM reach $0.12 again? It’s certainly in the cards if the bulls are able to keep up the momentum gained from this burn.
The weekly chart is really close to confirming an uptrend, in fact, the recent high of $0.0887 acted as resistance because it was the nearby weekly resistance. If the bulls are able to break above that level convincingly and then break above $0.10, XLM will be on its way to $0.12 and beyond.
The weekly chart is showing a significant increase in bull volume for the past 5 weeks and this week it’s certainly on its way to beat that of last week. These are all strong indicators for a bull market. XLM is also trading above the 12-period EMA and it’s currently trying to stay above the 26-period EMA.
Unfortunately, the monthly chart looks worse for the bulls. XLM is in a clear and pretty strong downtrend here. The RSI has been hovering around the oversold area, something that could help the bulls see a nice bounce, however, they would still need to set a lower high, a higher low and then a break of the last high in order to change the trend as breaking above $0.162 in one move seems unlikely.