- SDF announced the token burn of 50 percent
- XLM price rally fades out as traders losses interest
- Stellar Lumens (XLM) looks attractive from a long-term perspective
Stellar Lumens News Today – Two days ago, the Stellar Development Foundation (SDF) announced the burn of over half of the total XLM in circulation. The total supply of the digital currency reduced to 50 billion from about 105 billion. From the standpoint of a basic supply and demand, the decrease of coins in circulation should have a very bullish effect on the price of the digital currency.
Nevertheless, the digital currency is not reacting as expected. Many digital asset investors and traders were expecting the price of the digital currency to surge by 100 percent since its circulating supply was reduced by half. While the digital currency saw gains of 10 percent on Tuesday, it eventually yielded to profit-taking. Those that bought the coin when it surged are likely sitting on significant losses.
Stellar (XLM) Price Today – XLM / USD
Traders Who Bought XLM on Tuesday Were Whipsawed
Taking a closer look at the chart of Stellar reveals that the majority of the traders that bought the digital currency on Tuesday were whipsawed. They were driven by the fear of missing out (FOMO) to hit the buy button as they expected the halving of the supply to cause a sharp increase in the price of the digital currency. Nevertheless, the rally faded out quickly, as interest in the digital currency dropped.
The hourly chart of Stellar Lumens revealed that the majority of the gains the coin amassed were right after the SDF made the announcement about the coin burn. Two hours after the announcement, the price of Stellar Lumens (XLM) surged by more than 25 percent. The digital currency surged from $0.0702 to $0.0879. Since then, the price of XLM has been heading south. The trading volume of the digital currency has also been reducing, which is a sign that bulls are no longer interested in buying at current levels. Those that bought the digital currency after the first hour of the rally are likely in deep losses right now.
XLM Looks Attractive from a Long-Term Outlook
The losses of the digital currency may be temporary. According to Crypto Krillin, a margin trader, there is something bullish developing on Stellar Lumens in the long run. He said that the chart of the coin looks good on higher time frames and that the 50 percent token burn is definitely going to help. He also added that a lot of altcoins in the market are currently looking good. However, he is the only one that seems bullish on the digital currency, as other analysts are predicting that XLM would plunge further.
Princess Ogono is a writer, lawyer and fitness enthusiast. She believes cryptocurrencies are the future. When she's not writing, she spends time with her adorable cat, Ginger and works out often.