Here’s why Stellar (XLM) price trades 200% higher this week

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Stellar (XLM) price exploded over 80% yesterday to bring total weekly gains to about 200% after being selected by Ukraine to work on the central bank digital currency.

Fundamental analysis: Major cooperation agreed

The Ministry of Digital Transformation of Ukraine and the Stellar Development Foundation signed a deal to work together on developing the virtual assets ecosystem and create a Ukrainian digital currency.

The ministry and the SDF signed a Memorandum of Understanding and Cooperation, under which they will establish a sophisticated digital asset market infrastructure and reinforce Ukraine’s position in the financial market in Europe.

“The Ministry of Digital Transformation is working on creating the legal environment for the development of virtual assets in Ukraine. We believe our cooperation with the Stellar Development Foundation will contribute to the development of the virtual asset industry and its integration into the global financial ecosystem,” said Oleksandr Bornyakov, Deputy Minister of Digital Transformation for IT Development.

Bornyakov said developing a national digital currency also represents a significant aspect of this partnership as the majority of other major countries are developing their own digital currencies.

“The National Bank of Ukraine has been researching the possibility of CBDC implementation since 2017. It demonstrates Ukraine’s movement towards one of major financial trends. At the Ministry, we aspire to ensure our country’s adaptation to technological innovations and competitiveness in the financial market in Eastern Europe,” he added.

The signed memorandum outlines a few core aspects on which the SDF and the Ministry of Digital Transformation of Ukraine will focus including cooperation on establishing a digital assets market in Ukraine, providing support to digital assets-related projects, development and regulation of stablecoin circulation in the country as well as developing a national digital currency.

Technical analysis: XLM price explodes

XLM price exploded more than 80% yesterday on news from Ukraine to hit the highest levels recorded since May 2018. At one point, the digital asset gained around 220% this week, before a pullback fueled by profit-taking from XLM buyers took place.

XLM price weekly chart (TradingView)

As it can be seen in the chart above, the price action stopped at $0.43, where the 261.8% Fibonacci extension line sits. A weekly close above the $0.31 mark would lay the groundwork for a more sustainable push towards the January 2018 highs near $0.77.

Summary

The Ministry of Digital Transformation of Ukraine and the Stellar Development Foundation announced a partnership under which they will collaborate to develop a digital assets market in Ukraine and create a national virtual currency. This news helped Stellar to rise over 80% yesterday.

The post Here’s why Stellar (XLM) price trades 200% higher this week appeared first on Invezz.

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