XLM’s price performance has remained muted over the past five trading sessions, moving within a tight range.
This sideways action comes as Stellar prepares for a key milestone: the reset and stable release of its Protocol 23 Testnet, scheduled for August 14.
Stellar’s Protocol 23 Gears Up for Testnet Reset
Stellar’s much-anticipated Protocol 23 upgrade, first deployed to the Testnet on July 17, is expected to go live on the mainnet in September.
According to a June 10 blog post, Protocol 23 introduces eight Core Advancement Proposals to boost Stellar’s performance, smart contract capabilities, and developer tools.
Key upgrades include faster and cheaper Soroban smart contracts through in-memory storage and parallel execution, unified event streams for easier tracking, new host functions for better data handling, and configurable consensus settings to reduce ledger latency.
A testnet reset and stable release are scheduled for August 14.
XLM’s Latest Gain Risks Fading
Ahead of this reset, XLM’s price performance has remained lackluster. Although its price has risen by 4% over the past day, this move comes alongside declining trading volume. This negative divergence suggests the rally is not being fueled by genuine demand for the altcoin.
When an asset’s price climbs while trading volume falls, this indicates a lack of strong market participation. Such moves tend to be less sustainable, as they rely on thin liquidity and may reverse quickly if selling pressure returns. This puts XLM at risk of shedding its most recent gains.
Furthermore, the decline in capital influx into the XLM spot markets confirms the waning demand for the altcoin. According to Coinglass, the altcoin has recorded a net outflow of $1.41 million today, highlighting the lack of support behind XLM’s 4% gain.
This shows the weakening demand for the token and increased selling pressure, which can lower its price.
Can XLM Bulls Hold the Line?
Rising sell-side pressure threatens to push XLM below the critical $0.42 support level. In this case, the token’s value could drop toward $0.39 if profit-taking continues.
Conversely, if bullish momentum strengthens, the token could break through resistance at $0.4689. This opens the door for a rally toward $0.5206.
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