Key Takeaways:
- Klaytn token KLAY pumped 60% in two days.
- The asset has more to rally according to bullish technicals.
- Governance Council proposal to reduce block rewards might have influenced the charts.
YEREVAN (CoinChapter.com) – Klaytn token (KLAY) has jumped 60% since Oct 23 and settled at $0.22 ahead of the New York session on Oct 24, after briefly peaking at $0.28 on Sunday. However, technicals point to a possible continuation rally. Here’s why:
KLAY to reach $0.3?
Klaytn token broke out of a bullish setup dubbed the ‘falling wedge.’ The latter features two converging trendlines with a negative slope that enclose the price action and take the token’s value temporarily lower before a bullish rally. In fact, the move could equal the maximal distance between the trendlines, pinning the KLAY target price at $0.3.
Thus, if the Klaytn token follows the bullish scenario, it will rally another 72% in the upcoming sessions. Moreover, the trading volumes on the daily chart were ascending in the previous days. High trading volumes typically point to heightened interest from investors, who are willing to bet on the asset and keep the rally going.
While it is not yet clear if the token will reach $0.3 with any confidence, the reason behind Kaytn’s rally is noteworthy.
Klaytn Governance Proposal
Klaytn governance council put forth a proposal that recommended reducing existing block rewards by a third “to optimize the level of KLAY emission.”
If the proposal is approved by the Governance Council (vote ending 10.25), the inflation adjustment will be reflected on-chain around mid-November. The Klaytn team will share the results of the governance vote by 22.10.25.
read the announcement.
The Klaytn team submitted the proposal with the intent to address the volatility currently seen in the macro markets. If passed, the proposal will result in the following adjustments: KLAY newly minted per block will go from 9.6 to 6.4.
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Moreover, the Governance Council will gain control over 50% of the newly minted KLAY instead of the currently-established 34%. Klaytn Growth Fund (KGF), on the other hand, instead of the current 54%, will get 40% of minted KLAY.
In order to facilitate sustainable growth, tokenomics should be designed to drive demand for KLAY; in optimal scenarios, inflation and circulation should aim to be delta neutral in relation to demand. Achieving this balance is critical to the security and economics of Klaytn’s ecosystem.
further detailed the announcement.
The team also pointed out that “Klaytn block rewards — thus token inflation — should be adjusted to reflect current macro conditions,” which is necessary for healthy ecosystem growth in a turbulent market.
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