Why did the price of XLM fall?

Stellar (XLM) dropped 4.53% in the last 24 hours, underperforming the overall crypto market, which fell 3.13%. Here’s why:

1. Profit-taking after ETF news – The SEC approved the Hashdex ETF including XLM on September 25, but traders likely sold after the announcement.
2. Technical breakdown – XLM’s price fell below important moving averages and a key support level at $0.358, signaling bearish momentum.
3. Altcoin weakness – Investors moved money out of mid-sized altcoins like XLM as Bitcoin’s market share rose to 58.18%.

Deep Dive

1. Profit-Taking After ETF Approval (Negative Impact)

The SEC gave the green light to Hashdex’s ETF holding XLM, XRP, and SOL on September 25, a big step for institutional investors. Despite this, XLM’s price dropped 4.53% the next day.

Why? Often, markets “sell the news” after big announcements. Before the ETF approval, XLM had already gained 48.53% over 90 days, making it overbought. Traders likely cashed in their profits, especially since trading volume was low (only 2.74% of market cap), which can amplify price drops.

2. Technical Weakness Signals More Downside (Negative Impact)

XLM’s price fell below its 7-day and 30-day simple moving averages (around $0.373 and $0.375), with the Relative Strength Index (RSI) at 37.78, nearing oversold territory. The MACD indicator also turned negative, showing bearish momentum.

This means technical traders may have sold as XLM failed to hold the $0.358 support level. The next support is around $0.344. If prices fall below that, losses could extend toward $0.32.

3. Shift in Altcoin Sentiment (Mixed Impact)

The Altcoin Season Index dropped to 71 from 77 last week, while Bitcoin’s dominance increased to 58.18%. This suggests investors are favoring Bitcoin and safer large-cap coins over mid-sized altcoins like XLM.

However, Stellar has gained 269% year-to-date, showing strong long-term potential. Upcoming upgrades in Protocol 23, expected in Q3 2025, could increase developer activity and support future growth.

Conclusion

XLM’s recent decline is due to profit-taking after the ETF news, technical breakdowns, and a cautious market environment. Short-term risks remain near the $0.344 support level, but Stellar’s access to institutional ETFs and planned network upgrades could help stabilize prices in the medium term.

Key point to watch: Can XLM stay above the 200-day EMA at $0.343 to avoid a deeper drop? Also, keep an eye on Bitcoin’s price movements for clues about the overall market direction.

What could affect the price of XLM?

Stellar (XLM) is currently navigating a balance between growing interest from big investors and some technical challenges.

1. ETF Inflows – The SEC’s approval of the Hashdex ETF, which includes XLM, could increase demand from institutional investors (Bitget).
2. Protocol 23 Upgrade – Improvements aimed at handling more transactions per second (up to 5,000 TPS) may help expand decentralized finance (DeFi) and real-world asset (RWA) use cases (MEXC).
3. Regulatory Risks – Stellar’s focus on compliance helps manage risks related to SEC actions, especially compared to competitors like XRP.

Deep Dive

1. Institutional Demand via ETFs (Positive Outlook)

Overview:
The SEC recently approved the Hashdex Nasdaq ETF, which includes Stellar (XLM) alongside other coins like XRP and SOL. This approval, under a faster 75-day review process, opens the door for more regulated investment money to flow into XLM. Additionally, Grayscale’s GDLC ETF has added XLM, signaling growing institutional interest.

What this means:
Being part of ETFs can help stabilize XLM’s price by attracting investors who prefer passive, regulated funds. For example, when Bitcoin ETFs were approved, Bitcoin’s market value increased by about 20% in early 2025. If XLM gets even a small share (around 5%) of these ETF investments, it could mean over $750 million flowing into the coin, helping to offset recent price drops.

2. Protocol 23 & Real-World Adoption (Mixed Impact)

Overview:
Stellar’s upcoming Protocol 23 upgrade, scheduled for a mainnet vote on September 3, 2025, aims to boost the network’s speed to 5,000 transactions per second by running processes in parallel. Currently, Stellar supports over $522 million in real-world assets, including partnerships like Franklin Templeton’s tokenized U.S. Treasuries.

What this means:
While these upgrades could attract big companies—such as Visa using stablecoins for payments—the price of XLM hasn’t fully reflected this potential yet. Because XLM mainly serves as a “bridge currency” to facilitate transactions, direct demand for the token is somewhat limited. This is similar to XRP, which saw big price jumps after ETF rumors but still trades well below its all-time high.

3. Market Sentiment & Altcoin Season (Neutral to Bearish)

Overview:
XLM has gained nearly 50% over the past 90 days, aligning with a strong Altcoin Season Index score (69 out of 100). However, Bitcoin still dominates the market at 58.3%, and overall market sentiment is neutral, with a fear/greed index at 41 out of 100.

What this means:
If XLM falls below $0.325 (a key support level from July 2025), it could lead to panic selling due to weak technical indicators. On the other hand, if it climbs back above $0.397 (a significant Fibonacci retracement level), it might spark renewed buying interest—especially if the total altcoin market cap breaks through $1.15 trillion.

Conclusion

The future of Stellar (XLM) depends on how well it can leverage institutional interest from ETFs and real-world asset growth, while managing its current limitations and broader market uncertainties. The Protocol 23 upgrade and upcoming ETF launches in Q4 2025 will be important milestones.

Watch the XLM/BTC pair closely for signs that Stellar might start moving independently from Bitcoin’s market trends.

What are people saying about XLM?

The Stellar (XLM) community is divided between hope for a price breakout and concerns about a possible pullback as XLM tests important price points. Here’s what’s happening right now:

1. Traders are debating whether $0.40 will hold as support after the price was pushed back from resistance at $0.42.
2. Excitement around the upcoming Protocol 23 upgrade is driving optimistic predictions of a breakout above $0.55.
3. Price movements linked to XRP are back in focus following a 16% weekly increase.

Deep Dive

1. @CryptoTactician: Mixed Views on $0.40 Support

"Immediate support 0.403–0.406; breakdown below 0.402 risks drop to 0.395"
– CryptoTactician (89K followers · 210K impressions · 2025-08-18 07:54 UTC)
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What this means: The short-term outlook is uncertain. If XLM holds above $0.40, prices may stabilize. But if it falls below that level, it could trigger automatic sell orders, pushing the price down further. The recent 3.9% drop from $0.42 shows the buying momentum is weakening.

2. @StellarSDF: Optimism Around Protocol 23 Upgrade

"Market divided on Protocol 23’s impact – Q3 upgrade promises 5,000 TPS scalability"
– StellarSDF (312K followers · 1.2M impressions · 2025-08-19 16:44 UTC)
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What this means: The upcoming Protocol 23 upgrade could be a strong positive for XLM. It aims to increase transaction speed to 5,000 transactions per second (TPS), which could attract more decentralized finance (DeFi) projects. However, the recent 6% price drop in 24 hours shows some traders remain cautious.

3. @EGRAG_CRYPTO: Bullish Pattern Points to $0.55 Breakout

"Monthly close above $0.55 = structural breakout. XRP holders might regret missing this"
– EGRAG CRYPTO (132K followers · 890K impressions · 2025-08-14 02:33 UTC)
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What this means: There’s a strong technical pattern called a “cup-and-handle” that suggests if XLM closes above $0.55 by the end of the month, it could trigger a significant price increase—potentially doubling in value. However, the current price of $0.353 is still 35% below that key level.

Conclusion

Opinions on Stellar (XLM) are mixed right now. Technical traders are watching the $0.40 level closely as a make-or-break point, while others are waiting to see how the Protocol 23 upgrade will affect the market. The idea of a breakout above $0.55 is gaining attention, but some indicators, like the Relative Strength Index (RSI) at 78.25, suggest the coin might be overbought and due for a pullback. With $600 million in open interest and trading volumes spiking by 239%, expect volatility. The upcoming protocol update from the Stellar Development Foundation could be the key event that moves the market.

What is the latest news about XLM?

Stellar is gaining momentum thanks to regulatory support and technology improvements. Here’s what’s new:

1. ETF Inclusion (September 25, 2025) – The SEC approved a new ETF that includes Stellar (XLM), making it easier for big investors to get involved.
2. PYUSD Expansion (September 18, 2025) – PayPal’s stablecoin, PYUSD, now works on the Stellar network, enabling fast and cheap global payments.
3. Protocol 23 Launch (September 5, 2025) – Stellar upgraded its technology to handle more transactions and improve tools for developers.

Deep Dive

1. ETF Inclusion (September 25, 2025)

What happened: The U.S. Securities and Exchange Commission (SEC) approved the Hashdex Nasdaq Crypto Index ETF to include Stellar (XLM), along with XRP and SOL. This approval came faster than usual—75 days instead of about 270. This is the first time an ETF listed in the U.S. includes Stellar, joining Bitcoin and Ethereum. The ETF follows updated Nasdaq rules for crypto assets.
Why it matters: This is a positive sign for Stellar because it shows growing regulatory acceptance. It also opens the door for institutional investors, like large funds, to invest in XLM through a regulated product. The SEC’s faster approval process could lead to more crypto ETFs in the future. (Bitget)

2. PYUSD Expansion (September 18, 2025)

What happened: PayPal expanded its stablecoin, PYUSD, to the Stellar network. This allows users to send money across borders quickly and at very low cost—transactions cost just $0.000005 and settle in 3 to 5 seconds. Stellar now holds $1.3 billion worth of PYUSD, competing with bigger stablecoins like Tether ($171 billion) and USDC ($74 billion).
Why it matters: This is somewhat positive for Stellar. While more PYUSD transactions increase activity on the Stellar network, stablecoins like PYUSD might reduce the need for XLM as a “bridge” currency in transactions. Still, it strengthens Stellar’s role in global payments. (Bitget)

3. Protocol 23 Launch (September 5, 2025)

What happened: Stellar launched Protocol 23, nicknamed “WHISK.” This upgrade allows the network to run smart contracts in parallel, potentially handling up to 5,000 transactions per second. It also improves how developers work with events and reduces memory use. These changes aim to attract decentralized finance (DeFi) and real-world asset projects. Stellar’s total value locked (TVL) in DeFi is now $144 million, up 200% this year.
Why it matters: This is a strong long-term positive. Better scalability and developer tools can help Stellar grow its ecosystem. However, the immediate impact on XLM’s price is limited due to overall market conditions. (PaulGoldEagle on X)

Conclusion

Stellar’s recent ETF approval, PayPal partnership, and technical upgrades put it at the forefront of regulation, payments, and blockchain innovation. With more institutional interest and improved infrastructure, XLM has a chance to regain its previous highs from 2018. Keep an eye on ETF investments and developer activity in the coming months.

What is expected in the development of XLM?

Stellar’s roadmap is focused on improving smart contract performance, upgrading wallets, and increasing the use of real-world assets (RWA) on its platform.

1. Protocol 23 Upgrade (Q3 2025) – Introduces parallel smart contracts, boosting speed to about 5,000 transactions per second (TPS).
2. Freighter Wallet Upgrades (Q4 2025) – Adds advanced security features and social login options.
3. Meridian 2025 Conference (Q4 2025) – Major announcements about partnerships and ecosystem growth.
4. Protocol 24 (2026) – Plans to add privacy features and zero-knowledge proof technology.

Deep Dive

1. Protocol 23 Upgrade (Q3 2025)

Overview:
Protocol 23 launched on the main Stellar network in September 2025 after successful testing. It brings parallel execution for Soroban smart contracts, allowing the network to handle around 5,000 transactions per second. It also includes unified tracking of asset events (CAP-67) and improved data structures to reduce fees.

What this means:
This upgrade makes Stellar more scalable and efficient, which is great news for decentralized finance (DeFi) and real-world asset projects. However, there could be some short-term price fluctuations if adoption takes time after the upgrade.

2. Freighter Wallet Upgrades (Q4 2025)

Overview:
The Freighter wallet, which is open-source and widely used on Stellar, will get new features aimed at businesses. These include single-use wallets for companies, social login options like Google and Meta, and multi-factor authentication. A new Hosted Mode will allow institutions to try Stellar without fully integrating right away (CoinDesk).

What this means:
These improvements should make it easier for traditional financial institutions to start using Stellar, which is a positive sign for adoption. Still, thorough security checks are important before these features roll out.

3. Meridian 2025 Conference (Q4 2025)

Overview:
Stellar’s annual Meridian conference will take place in Rio in late 2025. It’s expected to highlight partnerships involving real-world assets, including collaborations with companies like Visa and organizations like the UN Development Program. Past Meridian events have often been followed by price increases (The Bull Runner).

What this means:
If Stellar announces major partnerships or hits its goal of $1.5 billion in total value locked (TVL), it could boost confidence and interest in XLM.

4. Protocol 24 (2026)

Overview:
Looking ahead, Protocol 24 aims to introduce privacy features using zero-knowledge proofs (zk-SNARKs) through partnerships with Nethermind and Wormhole. This will enable private transactions and better cross-chain compatibility. The exact launch date is still uncertain (Nethermind).

What this means:
These upgrades could make Stellar more attractive to institutions needing privacy and regulatory compliance, but success depends on smooth technical implementation.

Conclusion

Stellar’s roadmap for 2025-2026 focuses on making the network faster and more scalable (Protocol 23), improving user experience with wallet upgrades, and expanding real-world use cases through partnerships and events like Meridian. While short-term price movements may depend on how quickly Protocol 23 is adopted, these developments position Stellar’s XLM as a key link between traditional finance and decentralized finance.

What ecosystem metrics could signal if these upgrades are gaining traction?

What updates are there in the XLM code base?

Stellar's software recently got important updates, including support for Protocol 23, improvements to Soroban smart contracts, and key security fixes.

1. Protocol 23 Integration (September 25, 2025) – Enables faster transaction processing and better tracking of on-chain events.
2. Soroban Smart Contract Upgrades (August 19, 2025) – Added features like message signing, support for liquidity pools, and improved transaction handling.
3. Security & Stability Fixes (August 13, 2025) – Fixed bugs related to asset transfers and removed outdated methods to improve safety.

Deep Dive

1. Protocol 23 Integration (September 25, 2025)

Overview: Protocol 23 brings major improvements by allowing transactions to be processed in parallel, which means faster speeds—up to about 5,000 transactions per second (TPS). It also standardizes how events related to asset movements are tracked on the network.
Key updates include:

• CAP-67 (Unified Asset Events): Creates a consistent way to record all value transfers, including those from smart contracts.
• State Archiving: Moves inactive contract data to memory, reducing the cost of running Soroban contracts by around 40%.
• Parallel Execution: Lets the system handle multiple transactions at the same time if they don’t interfere with each other, thanks to a new ledger design.

Why it matters: This upgrade makes Stellar more scalable and efficient, which is great for decentralized finance (DeFi) and real-world asset (RWA) applications. It also makes development easier, positioning Stellar (XLM) as a strong option for enterprise blockchain solutions.
(Source)

2. Soroban Smart Contract Upgrades (August 19, 2025)

Overview: The Java Software Development Kit (SDK) for Soroban, Stellar’s smart contract platform, received important new features:

• A pollTransaction method that retries transactions on unreliable networks
• Support for ED25519 message signing and verification, following SEP-40 standards
• Added support for muxed accounts and liquidity pool IDs in the StrKey class

Why it matters: These updates mainly help developers building decentralized apps (DApps) that work across different blockchains. They also enable more complex financial tools like automated market makers that use pooled liquidity. While this doesn’t directly impact everyday users, it supports the growth of advanced DeFi projects on Stellar.
(Source)

3. Security & Stability Fixes (August 13, 2025)

Overview: Several critical issues were addressed to improve network safety and reliability:

• Fixed a bug causing asset transfers to fail when the sender is also the issuer (version 1.3.1)
• Removed the outdated pagingToken field from event responses
• Updated the Bouncy Castle cryptography library to fix risks related to signature spoofing

Why it matters: These fixes strengthen Stellar’s network, making it more dependable for institutional users and partners like MoneyGram and Visa, who rely on stablecoin transfers for payments.
(Source)

Conclusion

Stellar’s latest updates focus on boosting scalability with Protocol 23 while enhancing security for real-world payment use cases. The improvements to Soroban tools highlight a strategic move toward supporting DeFi and tokenized assets. With Protocol 23 activation on the horizon, it will be interesting to see how these changes help Stellar compete with other enterprise blockchains like Ripple and Algorand.