News
Astar Network Lags Before 350M Tokens Consumption: What About ASTR?
- The Astar community concluded the vote on the token burn proposal on June 2nd.
- Prior to the price turmoil of mid-June, ASTR had last traded below $0.070 in late November.
A star [ASTR] At press time, it was down 6.63%, in line with the broader cryptocurrency market, on fears of a worse-than-expected US inflation forecast.
The latest price action comes just a day after the Astar community voted to burn 350 million ASTR tokens, equivalent to 5% of its total supply in Genesis.
ASTR Token Burn Execution History
The Astar Foundation had set aside tokens for Polkadot parachain auctions, a mechanism for projects to secure parachain slots on Polka dot [DOT] relay chain.
Blockchain projects essentially submit bids in the native DOT token to the relay chain as part of the candlestick auction process to determine which ones get linked to a parachain slot for a given lease period.
Polkadot, however, announced in November 2023 that it would phase out the parachain auction system and replace it with Agile Coretime or Bulk Coretime.
In light of the updated mechanism, the Astar Foundation proposed removing the allocation from circulation as part of a strategy to improve ASTR’s tokenomics.
The 74 million ASTR rewards generated from this initial token allocation will be retained and held by the community treasury to fund further initiatives.
Astar Foundation head Maarten Henskens confirmed The proposal passed the voting stage, adding that the execution phase of the token burn will begin by the end of this week.
ASTR/USDT Technical Analysis
News of the conclusion of the vote quickly sent the price of ASTR soaring to a daily high of $0.0791.
CoinMarketCap data shows that ASTR’s 24-hour trading volume surpassed $78 million on Tuesday, up from $20 million on Monday.
In some exchanges, including Binance [BNB]ASTR traded as high as $0.80 before reversing course and resuming losses.
ASTR has since retreated and is one of the worst performing tokens on the day, down nearly 7% to $0.0705 at press time. The ASTR/USDT chart has highlighted the price struggles over the past two weeks.
Source: TradingView
ASTR/USDT dropped below $0.069 over the weekend, highlighting its two-week-long upside struggles since the token lost ground above $0.075 on June 17.
Source: TradingView
The ASTR/USDT 4-hours chart showed that ASTR price found support near $0.063 in an attempt to break out of consolidation at the current lows.
Source: TradingView
ASTR price settled below the 23.6% minor Fibonacci retracement level ($0.0732) in the hourly time frame.
Bullish speculators may try to secure major support at the most significant Fibonacci level of 0.382 to $0.0745 on the way to the critical Fibonacci level of 0.618 to $0.0767, where a price reversal is likely.
A potential upside above this target is expected to be tested heavily near Fibonacci 0.786, at $0.0782.
Earlier this week, ASTR showed overbought signs on the hourly chart, with the RSI above 70 on July 1st.
Source: TradingView
However, the RSI has been trending below 50, currently at 34.98, following the cryptocurrency market pullback over the past 24 hours. A reading below 30 would present ideal entry opportunities for short-term positions.
Ecosystem growth
Astar Network has continued to advance its ecosystem, recently launching Astar zkEVM.
The L2 scaling solution, which uses Polygon’s zero-knowledge technology, has become the first blockchain to integrate Polygon’s cutting-edge AggLayer technology.