Aster price drops by 2.8%, dragging the token below its $1 threshold following recent news that the team would embark on a plan to burn 50% of all buyback tokens.
Summary
- Aster DEX introduced its first token burn initiative, committing to burning 50% of buyback tokens from its Season 2 and 3 rounds while locking the remaining 50% for future airdrops.
- Despite the announcement, $ASTER price slipped below the $1 threshold to $0.98, as traders await clearer signs that the new buyback and burn model will translate into stronger long-term price momentum.
The Aster DEX team has announced that it would start refining its Season 3 buyback and airdrop model by burning some tokens in the vault. This marks the team’s first attempt at a token burn plan since it started buying back tokens from the market earlier this month.
In a recent post, Aster (ASTER) DEX revealed that it would start burning 50% of all tokens from its buyback rounds, including the ones from both the Season 2 and Season 3 phases. The tokens will be burned directly on the public buyback address, effectively reducing the circulating token supply which currently stands at around 2 billion.
Meanwhile, the remaining 50% of the buyback tokens will be redirected to Aster’s locked airdrop address, thus removing the tokens from circulation while also bolstering reserves for potential future airdrops.
By permanently removing 50% of its buyback tokens through a burn mechanism and locking the remaining 50% for future airdrops, the project is introducing a dynamic that would result in fewer tokens circulating in the market. This means that the token’s scarcity could lead to a surge in Aster price. Although, this is not always a guarantee.
Shortly after the news went viral, Aster price fell to $0.98, dropping from its previously held $1 threshold.
Moving forward, the team informs its community that the mechanism remains a flexible one that will keep changing over time.
“Future buyback and burn mechanisms will continue to evolve, reinforcing Aster’s commitment to sustainable growth and long-term value creation. Further updates will follow,” said the Aster team in its latest post.
According to data on BSC Scan, the ASTER buyback address currently hold $10.6 million worth of tokens. Aster tokens make up the majority of its holdings, amounting to $10.1 million worth of tokens. Meanwhile, the rest of its funds are stored in Binance-Peg BSC-USD, Tutorial (TUT), Thena (THE) and other tokens.
The latest buyback made by the team took place on Oct. 11, when the project purchased 100 million ASTER. Based on current market value, the tokens are now worth $98.9 million. A few days later, the team made its buyback address public so that traders could keep track of its holdings on-chain.
Earlier this month, the project announced that it would allocate around 70% to 80% of its Season 3 fees to conduct buybacks of its native token, ASTER. The exact amount of funds allocated would be revealed at the end of its third phase, the team stated.
“As a growing project, and in these uncertain market conditions, it’s important to maintain operational flexibility. Subsequent season airdrops and buybacks will be announced as details are confirmed,” said the Aster team.
Aster price analysis
Aster price is currently trading just below the key psychological threshold of $1, hovering around $0.99 after an extended downtrend through late October. The token has fallen far from its early October highs that neared $2.20. It now stands 58.9% below its previous all-time high at $2.41.
Despite the project’s recent announcement of an expanded buyback and burn program, Aster price momentum remains subdued. Another reason why Aster price has gone down could be due to the fake news circulating about Binance founder Changpeng Zhao dumping 35 million ASTER tokens. Zhao has since debunked this claim, stating the screenshots were photoshopped.
As a result, the introduction of the 50% token burn mechanism has yet to trigger a strong rebound, though it could support longer-term accumulation once investor confidence stabilizes. The 30-period moving average currently sits around $0.94, acting as a short-term resistance level.
A close above this line could indicate a shift in short-term sentiment for Aster price. However, if the token fails to make its way back to the $1 mark, it could invite further downside toward the $0.80 region if selling persists.
On the momentum side, the Relative Strength Index has climbed to around 61, suggesting moderate bullish recovery from recent oversold conditions. This indicates some buying activity following the buyback announcement, though traders appear to remain cautious.
Sustained RSI movement above 60 would strengthen the case for a trend reversal, but if it slips back below 50 the market could resume its bearish trajectory.
