Why did the price of XLM fall?

Stellar (XLM) dropped 2.97% in the last 24 hours, falling to $0.38, which is a bigger decline compared to the overall crypto market’s 1.08% drop. The main reasons include:

1. Technical Resistance – XLM couldn’t stay above the $0.42 price level, leading traders to take profits.
2. Network Upgrade Volatility – The recent Protocol 23 upgrade caused some uncertainty and temporary pauses in trading on certain exchanges.
3. Stablecoin Impact – Less support from USDT stablecoin on the Stellar network lowered activity.

Deep Dive

1. Technical Resistance and Profit-Taking (Negative Effect)

What happened:
XLM hit a price barrier around $0.42 after a strong 50% increase over the past three months. This level, close to its 7-day average price of $0.39, acted like a ceiling. A key technical level called the Fibonacci retracement at $0.413 also made it hard for the price to go higher.

Why it matters:
Many traders sold their XLM to lock in gains after the recent rise. This was supported by a weakening momentum indicator (RSI at 51.74), suggesting the upward trend was losing strength. When the price dropped below support levels around $0.403–$0.406, selling increased sharply, with trading volume jumping nearly 16% to $284 million.

What to watch:
If XLM stays below $0.38, it might fall further to the next support levels around $0.40 or even $0.363.

2. Protocol 23 Upgrade Aftermath (Mixed Effects)

What happened:
On September 3, 2025, Stellar launched Protocol 23, an upgrade designed to make the network faster and more scalable. However, this caused temporary pauses in deposits and withdrawals on exchanges like Bitbank (Bitbank).

Why it matters:
While upgrades usually improve the network over time, short-term disruptions can cause liquidity issues and prompt some traders to sell. The recent price drop happened alongside these operational challenges.

What to watch:
Keep an eye on how quickly new features like parallel transaction processing are adopted and whether developer activity increases after the upgrade.

3. Reduced Stablecoin Liquidity (Negative Effect)

What happened:
Tether (USDT) stopped supporting its stablecoin on the Stellar network (Bitget), which led to less activity on the network. Stablecoins like USDT are important because they help XLM function as a bridge for moving money across borders.

Why it matters:
With fewer stablecoins on Stellar, demand for XLM in cross-border payments drops. Reports show Stellar’s stablecoin market cap fell 15% month-over-month in August 2025.

Conclusion

The recent drop in XLM’s price is due to traders taking profits, short-term issues from the Protocol 23 upgrade, and less stablecoin activity on the network. While the upgrade could improve Stellar’s performance in the long run, the short-term outlook depends on whether XLM can hold above $0.40.

Key point to watch: Can XLM stay above its 200-day average price of $0.315 to avoid a bigger drop? Also, watch for changes in exchange deposits and withdrawals after the upgrade to gauge how big investors feel about Stellar.

What could affect the price of XLM?

Stellar’s price is balancing between upcoming network improvements and market ups and downs.

1. Protocol 23 Upgrade (Q3 2025) – This update aims to make the network faster and more efficient, which could attract more users. But delays might cause doubts.
2. XRP Connection (95% price link over 100 days) – Stellar’s price tends to move closely with Ripple’s XRP, meaning it can go up or down in similar ways.
3. ETF Buzz – Talks about including Stellar in new investment funds under SEC review are boosting hopes among big investors.

Deep Dive

1. Protocol 23 Upgrade (Positive Outlook)

What’s happening:
Stellar plans a major upgrade in the third quarter of 2025 to handle up to 5,000 transactions per second and speed up processing by handling transactions in parallel. Partnerships with companies like Visa (Weex) and Franklin Templeton, which is using $445 million in tokenized assets on Stellar, show its focus on real-world finance.

Why it matters:
If this upgrade works well, Stellar could become a stronger player in international payments and decentralized finance (DeFi), attracting more developers (Soroban smart contracts usage jumped 7 times after launching in 2024). But if it doesn’t meet expectations, investors might sell, as happened in August when network slowdowns caused a 14% price drop.

2. XRP Connection & Altcoin Market Trends (Mixed Outlook)

What’s happening:
Stellar’s price moves very closely with XRP’s price (95% correlation over 100 days, according to Weex). For example, Stellar’s price jumped 87% in one week in September 2025, following XRP’s rise to $3.70. Also, smaller cryptocurrencies saw a big increase in investment, with the Altcoin Season Index rising 55.81% in a month.

Why it matters:
If XRP benefits from positive news like clearer regulations, Stellar could also rise. But if Bitcoin’s market share grows above 57.5% (CMC), money might flow out of smaller coins like Stellar. Traders should watch the $0.403 to $0.41 price range for signs of a breakout.

3. Regulatory Support & ETF Interest (Positive Outlook)

What’s happening:
Stellar meets important financial messaging standards (ISO 20022), which helps it comply with European regulations (MiCA). A report from Galaxy Digital in September 2025 named Stellar as one of the top 12 tokens likely to get quick approval for exchange-traded funds (ETFs). Canary Capital’s “American-Made” ETF filing (The Bull Run) is currently under SEC review.

Why it matters:
If ETFs including Stellar get approved, it could bring a big wave of institutional investment similar to what Bitcoin saw in 2024. However, some risks remain, as shown by MEXC’s decision to delist XLM futures on September 5, 2025 (MEXC) due to regulatory concerns.

Conclusion

Stellar’s price will depend on how well the Protocol 23 upgrade performs, how XRP’s market moves, and regulatory approvals. Investors should watch the $0.40 to $0.42 price range for clues on where the price might head next. The big question: Can Stellar’s partnerships and upgrades help it compete with Bitcoin’s dominance in the last quarter of the year?

What are people saying about XLM?

The Stellar (XLM) community is debating whether the price will soar to $7 or fall to a critical support level around $0.40. Here’s what’s making headlines:

1. Protocol 23 upgrade excitement – Supporters expect big improvements in speed and capacity, while skeptics worry about a "sell the news" reaction.
2. $0.40 support level under pressure – Technical indicators are split between a possible price rebound or a further drop.
3. XRP price connection – Traders are influenced by regulatory news affecting XRP but question if this trend will last.

Deep Dive

1. @StellarOrg: Protocol 23 Mainnet Launch (Mixed Reactions)

"Launching the mainnet in Q3 2025 could be Stellar’s big moment for smart contracts, similar to Ethereum’s rise—or it could disappoint traders who buy too early."
– CoinMarketCap Community (8.2M followers · 12.4K impressions · 2025-08-19 16:44 UTC)
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What this means: Opinions are divided. Protocol 23 promises to handle up to 5,000 transactions per second, which is a big improvement. However, Stellar has struggled to maintain price gains after past upgrades. The 30-day Relative Strength Index (RSI) is at 45.6, indicating the price is neither overbought nor oversold right now.

2. @PeterBrandt: $7.20 Price Target (Optimistic)

"XLM must hold the $0.20 low from April. If it closes above $1 on the weekly chart, it could retest the 2018 high of $0.93 and eventually reach $7.20."
– Experienced Trader (489K followers · 2.1M impressions · 2025-07-17 11:35 UTC)
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What this means: This bullish outlook is supported by Franklin Templeton’s recent $445 million tokenization project on Stellar’s network. However, reaching $7.20 would require an 1,800% increase from the current price of $0.379. This would likely depend on Bitcoin’s price stabilizing and a technical pattern called a “cup-and-handle” forming over three years.

3. @CryptoTA: $0.40 Support Zone (Bearish Signals)

"Price rejection at $0.42 resistance suggests selling pressure. Falling below $0.402 confirms a false breakout, with targets at $0.395 and then $0.38 based on Fibonacci levels."
– Technical Analyst (326K followers · 891K impressions · 2025-08-18 07:54 UTC)
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What this means: Bearish momentum is increasing. Trading volume has dropped 62.7% since July’s peak. Between $0.40 and $0.42, nearly $80 million in liquidations occurred last month. If the price breaks below this zone, it could trigger more stop-loss orders and accelerate the decline.

Conclusion

Overall, the outlook for Stellar (XLM) is cautiously optimistic for the long term but shows short-term risks. The upcoming Protocol 23 upgrade, which will add smart contract functionality, along with partnerships involving real-world assets (like Franklin Templeton and Visa), provide strong growth potential. However, concerns remain about weakening price ties to XRP and low trading volume. Keep an eye on the $0.395 to $0.402 price range this week—holding above it could signal a bounce off the 50-day moving average, while falling below might test the liquidity zone near $0.265 from June. Whether Stellar’s focus on enterprise solutions justifies its current 48% discount compared to XRP’s market cap will become clearer as the network upgrade unfolds.

What is the latest news about XLM?

Stellar is moving forward with important technology updates and adapting to changes in the market, all while aiming to attract big institutions. Here’s the latest:

1. Protocol 23 Upgrade (September 3, 2025) – Improves speed and smart contract capabilities, encouraging more developer activity.
2. MEXC Futures Delisting (September 5, 2025) – The exchange stopped offering XLM futures, which could affect trading liquidity.
3. Meridian 2025 Conference (September 11, 2025) – Excitement builds for major announcements in Rio de Janeiro.

Deep Dive

1. Protocol 23 Upgrade (September 3, 2025)

Overview:
Stellar launched Protocol 23 on September 3, after exchanges like Bitbank temporarily paused deposits and withdrawals. This upgrade allows the network to process transactions in parallel, reaching up to 5,000 transactions per second (TPS). It also reduces delays in smart contracts through a tool called Soroban and improves how assets are tracked for better regulatory compliance.

What this means:
This upgrade is positive for Stellar (XLM) because it solves key issues that have slowed down growth, especially for businesses wanting to use the network. Faster and more efficient smart contracts could attract more decentralized finance (DeFi) projects. However, the real impact depends on how quickly developers start using these new tools. (Bitbank)

2. MEXC Futures Delisting (September 5, 2025)

Overview:
On September 5, MEXC exchange removed 48 futures contracts, including those for XLM. They called it a “strategic adjustment” but didn’t give details, leaving traders needing to change their positions quickly.

What this means:
This move is somewhat negative in the short term because fewer futures contracts can reduce speculative trading, which often adds liquidity. Still, the daily trading volume for XLM on spot markets remains strong at $287 million, so the overall effect might be limited. Traders should watch if futures trading moves to other platforms like Binance. (MEXC)

3. Meridian 2025 Conference (September 11–13, 2025)

Overview:
Stellar’s annual Meridian conference in Rio de Janeiro is expected to announce partnerships with big names like Visa and the United Nations Development Programme (UNDP). Updates on tokenizing real-world assets (RWA) are also anticipated. Past conferences have caused big price moves, with XLM rising 60% after Meridian 2024.

What this means:
If Stellar confirms new partnerships, especially with institutions like Visa integrating stablecoins, it could be very positive for XLM. But if the announcements don’t meet expectations, the price might drop as traders “sell the news.” (The Bull Runner)

Conclusion

Stellar is making solid technical progress with Protocol 23 but faces some challenges like the MEXC futures delisting. The Meridian 2025 conference could be a key moment, potentially driving new partnerships that help maintain XLM’s recent 48% quarterly gain—or it could bring volatility depending on the news. Stay tuned to see how things unfold in Rio.

What is expected in the development of XLM?

Stellar’s roadmap is focused on growing decentralized finance (DeFi), increasing use by businesses, and improving smart contracts.

1. Protocol 23 Mainnet (Q3 2025) – Supports up to 5,000 transactions per second (TPS) with parallel processing.
2. Freighter Wallet Upgrades (Q4 2025) – Adds easier login options and one-time-use wallets for payments.
3. Protocol 24 Development (2026) – Plans to add privacy features and better integration with traditional finance systems.

Deep Dive

1. Protocol 23 Mainnet (Q3 2025)

Overview:
Protocol 23 launched in September 2025 and brings a big speed boost to Stellar’s Soroban smart contracts. It can now handle up to 5,000 transactions per second, compared to about 1,000 before. This is possible thanks to improvements in how data is organized and tracked on the network (The Defiant).

What this means:
This upgrade is positive for Stellar (XLM) because faster transaction speeds make it more attractive for DeFi projects and large companies tokenizing assets, like Franklin Templeton’s $445 million in tokenized government bonds. However, there might be some short-term technical issues as the network adjusts.

2. Freighter Wallet Upgrades (Q4 2025)

Overview:
The Freighter Wallet will get new features aimed at businesses and everyday users. These include social media logins, wallets that can be used once for payments, and stronger security measures. The goal is to make it easier for people who aren’t tech experts to use cryptocurrency (CoinDesk).

What this means:
This update could encourage more people to use Stellar by making the experience simpler and safer. Its success depends on how well it works with existing financial systems.

3. Protocol 24 Development (2026)

Overview:
Protocol 24 is in early development and will focus on adding privacy features, such as zero-knowledge proofs, which allow transactions to be verified without revealing details. It also aims to improve how Stellar connects with traditional financial networks (PaulGoldEagle).

What this means:
These privacy upgrades could make Stellar more appealing to regulated financial institutions. However, the timeline is uncertain, and the technical challenges are significant.

Conclusion

Stellar is working hard to scale its network and attract business users. Protocol 23 has already increased transaction speed, and Protocol 24 is setting the stage for enhanced privacy. With a focus on compliant tokenization of real-world assets—currently valued at around $17 billion on-chain—Stellar (XLM) aims to connect traditional finance with DeFi. The big question is whether Protocol 24’s privacy features will help Stellar compete with platforms like Ethereum and Solana in the institutional market.

What updates are there in the XLM code base?

Stellar’s latest updates focus on making the network faster, easier to use, and better connected with other blockchains.

1. Protocol 23 “Whisk” Upgrade (September 5, 2025) – Introduces parallel smart contracts and a unified way to track token activity, preparing Stellar for decentralized finance (DeFi) and real-world asset (RWA) use.
2. v23.1.1 Release (September 3, 2025) – Fixes stability issues to support smooth integration with networks like Pi Network.
3. Mainnet Vote Timeline (August 4, 2025) – Protocol 23 activation planned for September 3, following a testnet reset on August 14.

Deep Dive

1. Protocol 23 “Whisk” Upgrade (September 5, 2025)

What’s new: This upgrade allows Stellar’s Soroban smart contracts to run at the same time instead of one after another. This reduces delays and increases the network’s speed to 5,000 transactions per second (TPS).

Key improvements include:

• Unified Asset Events: A standardized way to track token movements across the network, making it easier to follow transactions and activities.
• Better Resource Management: Moving contract data to faster memory (RAM) cuts the cost of contract interactions by about 40%.

Why it matters: These changes make Stellar more competitive for DeFi and real-world asset projects by lowering fees and improving performance, which is good news for Stellar (XLM) holders. (Source)

2. v23.1.1 Release (September 3, 2025)

What’s new: A small update that fixes rare bugs in Stellar Core, especially during busy times, and improves compatibility with other blockchain bridges like Pi Network.

Key fixes:

• Fixed ledger syncing problems during high network traffic.
• Improved support for assets moving across different blockchains.

Why it matters: This is routine maintenance that helps keep the network stable and ready for growth but doesn’t directly affect users. (Source)

3. Mainnet Vote Timeline (August 4, 2025)

What’s new: The schedule for activating Protocol 23 is set: a testnet reset on August 14 and a mainnet vote on September 3.

Important steps:

• Node operators need to update all software components after the testnet reset.
• Developers will have to redeploy smart contracts due to changes in the protocol.

Why it matters: Successfully passing the vote will strengthen Stellar’s technology and position in the market, though some short-term price swings may happen during the upgrade. (Source)

Conclusion

Stellar’s upgrades focus on making the network faster, cheaper, and more connected with other blockchains—key factors for attracting institutional projects involving real-world assets. With the Protocol 23 mainnet vote coming soon, it will be interesting to see how developer activity and total value locked (TVL) respond after the upgrade.