Lisk Price Surges 10% as Community Votes on 100M LSK Burn Proposal

The cryptocurrency market returned to a bullish outlook in mid-week as Bitcoin rebounded from $63370 to $67225. The 6% upswing further accelerated the buying momentum in the altcoin market boasted from the recent launch of ETH ETF. Amid the recovery sentiment, the Ethereum L2 Lisk reclaimed $1 price support, bolstering further rallies as the Community can vote for the burning of 100M LSK tokens.

Also Read: US PCE Inflation Comes In At 2.5%, What’s Next For Crypto Market?

Lisk Holders to Determine 25% Token Burn Outcome, Will Price Rally?

Lisk has announced a critical community vote to determine the fate of 100 million LSK tokens, representing 25% of the total capped supply of 400 million. The voting process will take place on the newly launched Lisk DAO platform, starting on September 24 and concluding on October 

The community has two options: 

1. Burning the 100 million LSK would reduce the total supply of LSK tokens by 25%, bringing the circulating supply down to 300 million. While this could trigger a sudden surge in LSK value due to supply scarcity, it would significantly reduce the DAO’s funding power to support future projects and initiatives.
2. If the community votes against burning the tokens, the 100 million LSK will be allocated to the Lisk DAO Fund. As per their blog post, this fund would empower the community to drive various initiatives, support growth campaigns, and finance innovative projects within the Lisk ecosystem over the next decade.

Both scenarios could significantly uplift the LISK price but the latter could have a long-term impact on LSK’s ecosystem and token value.

Moreover, Lisk Dao has allocated 25M LSK tokens to pay out staking rewards, adding a significant layer to the community’s ongoing discussions about token distribution and utilization.

Also Read: Semler Scientific To Acquire More Bitcoin (BTC) With Stock Sales

Inverted Head and Shoulder Pattern Sparks Major Reversal

The July market recovery bolstered the LISK price to bottom at $0.726 support. The potential reversal has uplifted the asset 37% to trade at $0.105, while the market cap jumped to $147 Million.

An analysis of the daily chart reveals this recovery as the formation of an inverted head and shoulder pattern. This chart pattern is commonly used in major market bottoms before a fresh rally.

The flattish trend in the Bollinger Band indicator highlights a shift from the prior downtrend to a potential accumulation.

Early today, the LISK price jumped 10% to tease a breakout from the pattern’s neckline resistance. A successful breach, with a daily candle closing, will intensify the bullish momentum and may push the asset to a potential target of $1.5 and $2

The declining trend ADX slope accentuates the prevailing bearish trend losing its momentum.

If the rising Lisk price fails neckline breaks at $1.1, the sellers would bolster another reversal and invalidate the bullish thesis. If it happens, the coin holders can expect a retest to multi-month support of $0.726.

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