Why did the price of XLM fall?
Stellar (XLM) dropped 1.16% in the last 24 hours, underperforming the overall crypto market, which fell 0.24%. This decline fits with its 10.1% loss over the past month but contrasts with a strong 62.9% gain over the last 90 days. Key reasons for the dip include:
- Struggling with Technical Resistance – XLM couldn’t stay above an important price level at $0.4089
- Futures Market Changes – MEXC stopped offering XLM futures on September 5, reducing trading options
- Market-Wide Slowdown – The Crypto Fear & Greed Index is neutral at 48, limiting momentum for altcoins
Deep Dive
1. Technical Resistance Rejection (Short-Term Bearish)
XLM hit resistance near the 23.6% Fibonacci retracement level at $0.4089 but failed to break through. While some technical indicators like the MACD histogram show slight bullish signs, the RSI14 is neutral, indicating no strong upward momentum.
This suggests traders likely took profits near this resistance, causing a pullback. Trading volume over the past day was $159 million, about 2.36% higher than usual, showing active selling pressure. If XLM closes below its 30-day simple moving average (SMA) at $0.381, it could drop further toward support at $0.361.
Keep an eye on whether buyers can hold the 50% Fibonacci level at $0.3867. Falling below this could lead to more losses.
2. Futures Market Changes (Mixed Effects)
On September 5, MEXC removed XLM futures contracts along with 47 other derivatives products. While spot trading (buying and selling the actual coin) continues as usual, futures trading liquidity has dropped. Open interest in XLM futures fell 18.44% over the past month.
This reduction in futures trading means fewer options for traders to use leverage or hedge positions, which may have reduced short-term speculative activity. Since the delisting happened weeks ago, its ongoing impact mainly reflects less volatility driven by derivatives, not panic selling.
3. Altcoin Season Slowing Down (Neutral to Bearish)
The Altcoin Season Index, which tracks how well altcoins perform compared to Bitcoin, dropped 5.13% to 74. This indicates investors are shifting money from mid-sized coins like XLM to higher-risk, higher-reward tokens. Meanwhile, Bitcoin’s dominance remains steady at 57.08%.
Stellar’s focus on real-world use cases, such as PayPal’s integration of its PYUSD stablecoin, means it attracts less speculative hype than meme coins or AI-related tokens. Institutional investors accumulating XLM for real-world asset (RWA) growth in Q4 may help reduce price swings caused by retail traders.
Conclusion
XLM’s recent dip is mainly due to profit-taking, less activity in futures markets, and a slowdown in altcoin momentum. However, its strong 62.9% gain over 90 days and the upcoming Protocol 23 upgrade—which will enhance its smart contract features—suggest this is more of a pause than a reversal.
What to watch: Can XLM stay above $0.38 (its 30-day SMA) to keep its momentum going into Q4? Also, watch Bitcoin’s price—if it falls below $114,000, it could trigger more selling in mid-sized altcoins like XLM.
What could affect the price of XLM?
Stellar’s price is currently caught between exciting upgrades to its technology and changes in the broader altcoin market.
- Protocol 23 Upgrade – A big boost in speed and real-world asset growth expected in Q3 2025 could increase demand.
- Stablecoin Growth – PayPal’s PYUSD stablecoin joining Stellar and improved cross-chain liquidity might increase network use.
- Altcoin Market Risks – Shifts in investor focus and Bitcoin’s dominance could challenge short-term price gains.
In-Depth Look
1. Protocol 23 Upgrade (Positive Outlook)
What’s Happening:
Stellar’s upcoming Protocol 23 upgrade, nicknamed “WHISK,” plans to allow multiple smart contracts to run at the same time. This aims to handle up to 5,000 transactions per second and improve tools for developers. The upgrade is expected in the third quarter of 2025. It also aligns with partnerships like Franklin Templeton, which is tokenizing $445 million in U.S. Treasury bonds, and Paxos, both helping bring real-world assets (RWA) onto Stellar.
Why It Matters:
Better scalability means Stellar can support more decentralized finance (DeFi) projects and institutional users, making Stellar’s native coin, XLM, more useful. Past upgrades, like Soroban in 2024, led to a sevenfold increase in activity on the network. If Protocol 23 succeeds, XLM could challenge its previous high price of $0.87 (CoinMarketCap).
2. Stablecoin Liquidity & Competition (Mixed Outlook)
What’s Happening:
PayPal’s stablecoin, PYUSD, expanded to Stellar in June 2025 and currently holds a market cap of $1.3 billion. However, major stablecoins like Tether (USDT) and USD Coin (USDC) dominate the market with $171 billion and $74 billion respectively. Stellar’s total value locked (TVL) at $122 million is much smaller compared to Ethereum and Solana.
Why It Matters:
While PYUSD’s presence could increase transaction volume on Stellar, it’s unclear if Stellar can capture a significant share of the stablecoin market. Also, XLM’s price movement is closely linked to Ripple’s XRP (with a 100-day correlation of 0.95), meaning regulatory issues affecting Ripple could impact Stellar too (Yahoo Finance).
3. Altcoin Season Volatility (Potential Downside)
What’s Happening:
The Altcoin Season Index currently favors Stellar, but Bitcoin still holds 57% market dominance. Derivatives markets show $920 billion in open interest, indicating high risk. XLM’s 24-hour trading volume dropped 2.63% to $155 million, and futures open interest fell 6.6% in August 2025.
Why It Matters:
If investors shift focus back to Bitcoin, liquidity could leave altcoins like XLM. Technical indicators such as the Relative Strength Index (RSI) at 50 and MACD histogram slightly positive (+0.00216) show neutral momentum. However, if XLM falls below the $0.361 support level, it could drop about 15% to $0.30 (CMC Technicals).
Conclusion
Stellar’s path in 2025 depends largely on how well Protocol 23 is implemented and whether real-world asset tokenization grows enough to balance out risks from the altcoin market. Technical signals suggest a possible price pivot near $0.38, but traders should watch Bitcoin’s market dominance and stablecoin activity on Stellar closely. Will XLM keep up its impressive 290% yearly gain if the altcoin season cools off?
What are people saying about XLM?
The Stellar (XLM) community is divided between hopes for a big breakout and concerns about a price drop. Here’s what’s making headlines:
- Excitement over Protocol 23 upgrade – Expected to improve how well the network handles transactions
- Struggle at $0.42 price level – Traders are preparing for possible price swings
- Peter Brandt’s $7.20 price prediction – Long-term optimism mixed with doubts
In-Depth Look
1. @johnmorganFL: Positive Outlook on Protocol 23 Launch
“Stellar Development Foundation’s Protocol 23 upgrade (Q3 2025) could push XLM to new highs by improving scalability.”
– @johnmorganFL (12.4K followers · 58K impressions · 2025-08-19 16:44 UTC)
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What this means: This is good news for XLM because the upgrade aims to make transactions faster and more secure. This could attract big players like banks for things like international payments.
2. CoinMarketCap Community: Bearish Signs at $0.42 Resistance
“XLM hit resistance at $0.42 and dropped. If it falls below $0.402, it could correct further to $0.395.”
– CoinMarketCap analyst (2025-08-18 07:54 UTC)
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What this means: This is a short-term warning. When a price can’t break through a resistance level, it often triggers sell-offs. The $0.40 to $0.42 range is now a key area where buyers and sellers are active.
3. Peter Brandt: Long-Term $7.20 Target Has Mixed Views
“XLM could rise to $7.20 if it stays above April’s $0.20 low and breaks $1 resistance.”
– Peter Brandt via @johnmorganFL (2025-07-17 11:35 UTC)
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What this means: This is a cautious long-term outlook. The chart pattern suggests potential growth, but reaching $7.20 means a huge increase (about 1,785%) from current prices around $0.38, which would take time and patience.
Conclusion
The overall view on Stellar (XLM) is mixed. Traders are cautious around the $0.40 level but hopeful about the benefits of the upcoming Protocol 23 upgrade. Keep an eye on how the price closes this Friday around $0.42 — breaking above or below this could set the tone for the weeks ahead before the upgrade launches.
What is the latest news about XLM?
Stellar is making important moves with technology upgrades and market changes. Here’s what’s new:
- Protocol 23 Upgrade (September 19, 2025) – Improves network speed and aims to grow tokenized assets to $3 billion.
- PYUSD Stablecoin Expansion (September 18, 2025) – PayPal adds its stablecoin to Stellar for cheaper global money transfers.
- Futures Delisting Impact (September 5, 2025) – MEXC removes XLM futures trading, raising concerns about liquidity.
Deep Dive
1. Protocol 23 Upgrade (September 19, 2025)
Overview: Stellar’s latest update, called Protocol 23 or WHISK, focuses on making the network faster and easier for developers to build on. A big goal is to grow the market for tokenized real-world assets (like stocks or real estate turned into digital tokens) to $3 billion by the end of 2025. Stellar is partnering with companies like Paxos and Onando to reach this goal. Big institutions such as IBM, MoneyGram, and Franklin Templeton are also working with Stellar on cross-border payments.
What this means: This upgrade is positive for Stellar (XLM) because it could lead to more people using the network and more practical uses for the token. However, success depends on how well these plans are executed and how much developers get involved after the upgrade. (MEXC)
2. PYUSD Stablecoin Integration (September 18, 2025)
Overview: PayPal has expanded its PYUSD stablecoin onto the Stellar network using LayerZero technology. This allows PYUSD to move across different blockchains and reduces the need to use traditional banks for transfers. PYUSD currently has a market value of $1.3 billion, which is small compared to bigger stablecoins like USDT ($171 billion), but it shows potential for growth.
What this means: This is somewhat positive for Stellar. More PYUSD transactions could increase activity on the Stellar network. However, PYUSD faces strong competition from larger stablecoins and possible regulatory challenges. (Bitget)
3. Futures Delisting Impact (September 5, 2025)
Overview: The crypto exchange MEXC removed 48 futures contracts, including those for XLM, without giving specific reasons. This follows earlier moves by CoinEx to reduce XLM margin trading rates. After the delisting news, XLM’s price dropped about 5% in a week.
What this means: This is a negative short-term development because it limits trading options and liquidity for XLM futures. However, since most XLM trading happens in the spot market (about 95% of volume), the long-term impact might be limited. (MEXC)
Conclusion
Stellar is moving forward with important upgrades and partnerships like Protocol 23 and PayPal’s PYUSD stablecoin. Still, challenges remain as futures delistings show some market instability. The big question is whether growing institutional interest in tokenized real-world assets can balance out the pressures from the derivatives market.
What is expected in the development of XLM?
Stellar’s upcoming plans focus on improving scalability, privacy, and expanding the use of real-world assets (RWAs) on its network. Key highlights include:
- Protocol 24 “ZK Upgrade” (Q4 2025) – Boosts privacy and enables secure transactions across different blockchains.
- Enterprise Payment Solutions (Q4 2025) – Simplifies financial processes for businesses using on-chain technology.
- Freighter Wallet Security Boost (Q4 2025) – Adds stronger security and easier access for users.
- RWA Expansion (2026) – Grows the use of tokenized real-world assets through partnerships with financial institutions.
Deep Dive
1. Protocol 24 “ZK Upgrade” (Q4 2025)
Overview:
Stellar’s Protocol 24 will introduce zero-knowledge (ZK) proofs, a technology that allows transactions to be verified without revealing sensitive details. This upgrade, developed with partners like Nethermind, Boundless, and Wormhole, will support private transactions across different blockchains and enable new types of applications.
What this means:
This is a positive development for Stellar (XLM) because it strengthens privacy and compliance, making the network more attractive for decentralized finance (DeFi) and institutional users. Improved compatibility with Ethereum’s standards could also bring more developers and use cases to Stellar. However, adopting this advanced technology may face delays.
2. Enterprise Payment Flows (Q4 2025)
Overview:
Stellar plans to offer tools designed for businesses to handle payroll, invoices, and treasury management using Soroban smart contracts. These tools aim to provide fast, programmable, and low-cost transactions, targeting up to 5,000 transactions per second.
What this means:
This could encourage more companies to use Stellar, especially if partnerships with big names like Visa and IBM develop. Still, competition from other payment networks like Ripple and SWIFT means the impact might be gradual. Success depends on how well traditional financial firms adopt these solutions.
3. Freighter Wallet Upgrades (Q4 2025)
Overview:
The Freighter Wallet will get new features such as social media logins, multi-factor authentication, and single-use wallets that can be created on demand. These improvements aim to make it easier and safer for everyday users to manage their crypto.
What this means:
These upgrades are likely to boost user adoption by simplifying access and improving security. This could also attract businesses looking for compliant ways to issue digital assets on Stellar.
4. RWA Tokenization Scaling (2026)
Overview:
Stellar plans to grow its $522 million market of tokenized real-world assets, like Franklin Templeton’s tokenized U.S. Treasury bonds, by working with asset managers and regulators. The Composable Data Platform (CDP) will help make these tokenized assets more transparent and easier to manage.
What this means:
This is a promising long-term opportunity since the RWA market is worth around $24 billion. Stellar’s focus on regulatory compliance gives it an advantage, but progress depends on clearer crypto regulations.
Conclusion
Stellar’s roadmap combines important technical upgrades, like Protocol 24’s privacy features and Soroban’s scalability, with practical steps to increase real-world use through enterprise tools and asset tokenization. Its focus on compliance and low transaction costs positions Stellar well for institutional adoption. The big question is whether Protocol 24’s privacy improvements will help Stellar outpace competitors like Algorand in the race to dominate real-world asset tokenization.
What updates are there in the XLM code base?
Stellar’s technology is moving forward with important updates like Protocol 23, new cross-chain swap options, and improved tools for developers.
- Protocol 23 Mainnet Vote (August 2025) – Boosts speed and efficiency by running smart contracts in parallel.
- NEAR Bridge-Free Swaps (August 19, 2025) – Allows direct asset swaps across more than 20 blockchains without middlemen.
- Java SDK v23.0.0rc2 (July 2025) – Adds features like message signing and better support for new smart contract capabilities.
Deep Dive
1. Protocol 23 Mainnet Vote (August 2025)
What’s happening: Stellar is preparing to activate Protocol 23 on its main network. This upgrade improves how smart contracts (automated programs on the blockchain) run by allowing multiple transactions to process at the same time. It also introduces ways to store contract data more efficiently and reduces costs when contracts interact with each other. Additionally, it standardizes how apps track asset events, making it easier for developers to build on Stellar. The community will vote on this upgrade on August 14, 2025.
Why it matters: This upgrade is positive for Stellar (XLM) because it makes decentralized finance (DeFi) applications faster and cheaper to use. It also supports tokenizing real-world assets (RWA), like real estate or stocks, on the blockchain. Developers will find it easier to create complex applications without network slowdowns.
2. NEAR Bridge-Free Swaps (August 19, 2025)
What’s happening: Stellar is integrating with NEAR Protocol’s Intents system to allow users to swap cryptocurrencies like Bitcoin (BTC), Ethereum (ETH), or XRP directly into Stellar’s USDC stablecoin. This process doesn’t require bridges or wrapped tokens, which are often used to move assets between blockchains but can add complexity and risk.
Why it matters: While this update might not immediately impact XLM’s price, it’s a positive long-term development. It lowers the barriers for users from other blockchain networks to access Stellar’s ecosystem, enhancing Stellar’s role in connecting multiple blockchains smoothly.
3. Java SDK v23.0.0rc2 (July 2025)
What’s happening: Stellar released an updated software development kit (SDK) for Java developers. This version supports new features needed for Protocol 23, including secure message signing, handling multiple accounts in one transaction, and better ways to work with liquidity pools and balances. It also removes older methods that don’t fit with the new parallel processing model.
Why it matters: This update makes it easier and safer for developers to build applications on Stellar. It ensures that new apps will work well with upcoming network improvements, which helps grow the Stellar ecosystem.
Conclusion
Stellar’s recent updates focus on making the network faster and more scalable (Protocol 23), improving cross-chain compatibility (NEAR integration), and enhancing developer tools (Java SDK). These improvements prepare Stellar to support large-scale decentralized finance and cross-border payments. The big question is whether Protocol 23’s increased capacity will speed up adoption of Stellar’s tools for tokenizing real-world assets by businesses and institutions.