Today, the Stellar development foundation announced that it had burned 55 billion out of a total of 105 billion XLM, leaving only 50 billion in existence. The foundation stated that this is not a diversion from their current mission, but rather a way to make the fund more efficient.
The foundation also announced that it has halted airdrops since it was their least effective program.
Out of the 50 billion coins remaining, slightly less than 30 billion are held by the Stellar Foundation and are being used for initiatives that support the ecosystem.
They are planned to be used in several categories, more specifically:
- Direct development – 12 billion
- Ecosystem support – 2 billion
- Use-Case investment – 10 billion
- User Acquisition – 6 billion
The other 20 billion are spread out throughout the world.
This announcement likely caused a spike in the XLM price. Additionally, the price looks to have made a long-term bottom and is likely to soon begin a new uptrend in both the USD and BTC pairs.
XLM: Long-Term Bottom
The XLM price, which has been decreasing since October 2018, fell to a long-term support area found at 500 satoshis.
There, it created a double-bottom, initially in the form of a lower wick followed by a strong bullish close.
Additionally, the weekly MACD made a bullish cross and is moving upward.
In the daily chart, we can see that the price is making an attempt at breaking out above 900 satoshis.
Additionally, there is a very strong bullish divergence upward trend that has held.
If it continues to do so, XLM is likely to break out and move above the resistance area.
Looking at the USD pair we see a similar outlook.
The price reached the major support area at $0.05 — a level which acted as resistance in the 2017 upward move.
From there, it has begun its current move to the upside.
Disclaimer: This article is not trading advice and should not be construed as such. Always consult a trained financial professional before investing in cryptocurrencies, as the market is particularly volatile.
Images courtesy of Shutterstock, TradingView.
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