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

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.

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 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.

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.