Key Takeaways:
- The Gala Games team burnt tokens worth over $650 million.
- The platform was looking to strengthen investor confidence in the platform.
- Meanwhile, GALA prices are moving in a bullish pattern.
NEW DELHI (CoinChapter.com) — P2E gaming platform Gala Games announced burning most of its token holdings launched post the V2 upgrade on May 15. An airdrop of the V2 tokens accompanied the upgrade.
The team distributed V2 tokens to all existing GALA holders at a 1:1 conversion rate of the V1 tokens. Token holders do not need to take any action for the airdrop or the conversion.
On May 15, the Gala team burned 20.96 billion of its native tokens as a part of its strategy of destroying its net platform revenues. Originally, the team had promised to burn 2 billion tokens only.
The Gala Games team stated they aimed to alleviate fears of an exit scam for the sake of the platform’s users. Therefore, the team burned the “vast majority” of its token reserves accrued from ecosystem rewards by burning 15 billion GALA tokens.
This is the vast majority of our reserves in $GALA. While we have a few wallets with general operational expenses, OpenSea fees, etc, we now no longer control any appreciable part of the token supply.
Gala Games said in a blog post
The gaming platform acknowledged that users might view its reserves as risky to the health of the platform. It has also added $2 billion of native tokens to a newly-created wallet reserve.
GALA Moving Inside Bullish Flag Pattern
Meanwhile, the GALA token price is moving inside a bullish technical pattern called the ‘Bull Flag.‘
The bull flag is a continuation pattern that forms during an uptrend and resembles a flag. The flagpole forms from a near-vertical rise in an asset’s price, while the flag results from a counter-trend or a period of consolidation.
Despite the strong vertical rally, the asset’s price does not drop as bulls maintain the buying pressure. As a result, the breakout from the flag pattern often results in a powerful uptrend. Traders calculate the price target of the breakout by adding the length of the flag pole to the breakout price level.
Therefore, the token could rise 355% from current levels and reach $0.15 after confirming the pattern.
Price Rally Weakening
The Gala token price rallied over 22% since May 12 to form a daily high near $0.033 on May 19. However, long upper wicks on the daily candles suggest that bullish momentum for the token is weakening.
Bulls try to break above the 20-day EMA (red wave) resistance before challenging the resistance level near $0.035. Moreover, a break and hold above immediate resistance could increase traders’ confidence in the GALA price rally and help the token rise to $0.0385, near its 100-day EMA (blue wave).
However, if the rally fails, GALA risks a drop to the support level near $0.0312. Failure of the immediate support level could force the token to shed 16% from its current levels and test support near $0.028. A drop to $0.028 would effectively erase nearly all of GALA’s gains in 2023.
The relative strength index for GALA remains neutral, clocking at 46.07 on the daily charts.
