- The Astar community concluded voting on the token burn proposal on the 2nd of June.
- Before mid-June’s price struggles, ASTR last traded below $0.070 at the end of November.
Astar [ASTR] was trading 6.63% in the red at press time, in tandem with the broader crypto market, following fears of a worse-than-expected U.S. inflation outlook.
The latest price move comes just a day after the Astar community voted in favor of burning 350 million ASTR tokens, translating to 5% of its total supply at genesis.
ASTR token burn execution timeline
The Astar Foundation had set aside the tokens for the Polkadot parachain auctions — a mechanism for projects to secure parachain slots on the Polkadot [DOT] relay chain.
Blockchain projects essentially submit bids in the DOT native token to the relay chain as part of the candle auction process to determine which ones connect to a parachain slot for a given lease period.
Polkadot, however, announced in November 2023 that it was phasing out the parachain auctions system and replacing 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.
Rewards amounting to 74 million ASTR yielded from this initial token allocation will be retained and held by the community treasury to fund other initiatives.
Astar Foundation Head Maarten Henskens confirmed the proposal passing the vote stage, adding that the execution phase of the token burn will commence by the end of this week.
ASTR/USDT technical analysis
News of the vote conclusion briefly catapulted ASTR price to an intraday high of $0.0791.
CoinMarketCap data shows that ASTR’s 24-hour trading volume topped $78 million on Tuesday, up from $20 million on Monday.
On some exchanges, including Binance [BNB], ASTR traded as high as $0.80 before reversing course and tracking losses.
ASTR has since retreated and is one of the worst-performing tokens on the day, down almost 7% to $0.0705 at press time. The ASTR/USDT chart highlighted price struggles in the last two weeks.
Source: TradingView
Over the weekend, ASTR/USDT slid below $0.069, highlighting its upside struggles that have extended for two weeks now since the token lost ground above $0.075 on June 17.
Source: TradingView
The ASTR/USDT 4-hour chart showed that ASTR price has established support near $0.063 as it attempted to break out of consolidation in the current low ranges.
Source: TradingView
ASTR’s price hovered below the 23.6% Fibonacci minor retracement level ($0.0732) in the hourly time frame.
Bullish speculators can look to secure major support at the more significant 0.382 Fibonacci level at $0.0745 on the path toward the critical 0.618 Fibonacci level at 0.0767, where price reversal is likely.
Potential upside beyond this target is expected to be tested heavily near the 0.786 Fibonacci, at $0.0782.
ASTR flashed signs of being overbought on the hourly chart earlier this week, with an RSI above 70 on the 1st of July.
Source: TradingView
The RSI has, however, been trending below 50, currently at 34.98, following the crypto market’s pullback in the last 24 hours. A reading below 30 would present ideal entry opportunities for short-term positions.
Ecosystem growth
Astar Network has continued advancing its ecosystem, recently launching Astar zkEVM.
The L2 scaling solution, which utilizes Polygon’s zero-knowledge technology, became the first blockchain to integrate Polygon’s cutting-edge technology AggLayer.
