Why did the price of XLM fall?

Stellar (XLM) dropped 1.05% in the last 24 hours to $0.309, underperforming the overall crypto market, which fell by 1.77%. The main reasons include institutional investors taking profits, negative technical signals, and the impact of Bitcoin falling below $107,000.

1. Institutional selling – Over $89 million worth of XLM sold at a key resistance level
2. Technical breakdown – Price fell below an important Fibonacci support level
3. Market-wide caution – Altcoins sold off amid concerns about U.S. banks

Deep Dive

1. Institutional Profit-Taking (Negative Impact)

Overview:
Between 6:00 and 8:00 UTC on October 17, there was heavy selling of XLM, with 91.33 million tokens sold—twice the usual amount during corporate hours. The price dropped from $0.32 to $0.30, hitting resistance around $0.31, a level where institutions often take profits (Yahoo Finance).

What this means:

• Experienced investors are likely adjusting their portfolios ahead of the Q4 earnings season.
• The resistance at $0.31 shows institutions are cautious about short-term price gains.
• A recent network upgrade (Protocol 23) did not provide lasting positive momentum.

What to watch:
Look for continued large transfers from corporate wallets on the blockchain. Persistent outflows could mean deeper price drops.

2. Bearish Technical Signals (Mixed Impact)

Overview:
XLM’s price fell below the 50% Fibonacci retracement level at $0.3058. The RSI (Relative Strength Index) is at 28.78, indicating the coin is oversold, and the MACD (Moving Average Convergence Divergence) shows negative momentum. The 30-day Simple Moving Average (SMA) at $0.3702 now acts as resistance.

What this means:

• The recent price drop breaks the “Uptober” rally pattern from early October.
• The next support level is at $0.28 (78.6% Fibonacci retracement), but oversold conditions might lead to a short-term bounce.
• Futures open interest increased by 1.16% over 4 hours to $140 million, showing traders are uncertain about the next move (U.Today).

Key level to watch:
If XLM closes above $0.317 daily, it could signal a false bearish move (bear trap). Falling below $0.30 risks a sharp sell-off.

3. Market-Wide Risk Aversion (Negative Impact)

Overview:
XLM’s decline happened alongside:

• Bitcoin dropping 3.2% to $108,000 amid worries about U.S. regional banks.
• Total crypto liquidations reaching $19 billion between October 10-17 (CoinTelegraph).
• The Altcoin Season Index falling 66% over 30 days to 26 out of 100.

What this means:

• Investors are moving money into safer assets like cash and U.S. Treasuries instead of riskier altcoins.
• Stellar’s strong correlation with XRP (0.91) made its losses worse as Ripple also faced selling pressure.

Conclusion

XLM’s recent drop is driven by institutional profit-taking, technical breakdowns, and a broader pullback in altcoins due to macroeconomic concerns. While oversold conditions and $140 million in futures bets suggest a possible rebound, a sustained recovery depends on Bitcoin stabilizing and renewed buying from institutions.

Key watch: Can XLM hold the $0.30 support level ahead of the October 20 options expiry, which involves $28 million in contracts?

What could affect the price of XLM?

Stellar’s price is facing mixed signals amid a generally weak market.

1. Protocol 23 Upgrade – Improvements in speed and features, but little immediate price change.
2. ETF Developments – Progress in regulations could bring more institutional investors.
3. Economic Concerns – Worries about regional banks are affecting overall crypto confidence.

Deep Dive

1. Protocol 23 & Ecosystem Growth (Mixed Impact)

Overview: Stellar’s Protocol 23 upgrade, which launched in September 2025, brought faster transaction speeds (up to 5,000 per second), the ability to run multiple smart contracts at once, and better tools for developers. Partnerships with companies like Visa, PayPal (using the PYUSD stablecoin), and Archax (which is working on tokenizing $200 million in real-world assets) aim to make Stellar more useful in everyday finance.

What this means: These upgrades make Stellar’s technology stronger and more attractive for businesses, but the price of Stellar’s token, XLM, has dropped about 14% this week. Historically, big network upgrades often take months before they affect the price. The real test will be if more people and companies start using Stellar, shown by metrics like total value locked (TVL), which is currently $150 million, and transaction volume.

2. Regulatory Tailwinds & ETF Hopes (Bullish Impact)

Overview: XLM is included in several proposed exchange-traded funds (ETFs), such as Canary Capital’s “American-Made” ETF and Hashdex’s multi-asset ETF, both under review by the U.S. Securities and Exchange Commission (SEC). The SEC recently approved new rules in September 2025 that make it easier to list tokens that meet compliance standards. WisdomTree’s XLM exchange-traded product (ETP), which has $37 million in open interest, is already trading in Europe.

What this means: If a U.S. ETF for XLM gets approved, it could lead to a price rally similar to what Bitcoin experienced in 2024 when its ETF was approved. Analysts from Galaxy Digital list XLM among 12 tokens that could get fast-track approval. However, competition from other tokens like XRP and SOL included in ETF baskets might limit how much XLM’s price can rise.

3. Macro Risks & Market Sentiment (Bearish Impact)

Overview: The crypto Fear & Greed Index is low at 28 out of 100, showing that investors are worried, especially about the stability of regional U.S. banks like Zions Bancorp (down 12%) and Western Alliance (down 10%). Stellar’s 24-hour turnover ratio is 3.7%, indicating low liquidity, which can make price drops more severe during sell-offs.

What this means: XLM’s price tends to move closely with Bitcoin (90-day correlation of 0.89), so if Bitcoin falls, XLM is likely to follow. If XLM’s price falls below $0.30 (currently around $0.307), it could trigger automated selling that pushes the price down to about $0.25, which is a key technical support level.

Conclusion

Stellar’s recent technology improvements and potential ETF approvals offer good long-term opportunities. However, short-term price movements will depend heavily on overall market conditions and Bitcoin’s performance (currently dominating 59% of the crypto market). Keep an eye on XLM’s $0.30 support level and the progress of ETF approvals to see if institutional investments can help stabilize the price amid ongoing market uncertainty.

What are people saying about XLM?

The Stellar (XLM) community is divided between hopes for a price breakout and concerns about a possible correction. Here’s what’s trending right now:

1. Traders are watching $0.40 as a key support level after the price was rejected near $0.42 resistance.
2. The Protocol 23 upgrade has sparked discussions about whether it will improve scalability or cause short-term price swings.
3. Analysts disagree on whether Stellar can reach a long-term target of $7.20 or if bearish signals suggest a downturn.

Deep Dive

1. @johnmorganFL: Price Rejection at Resistance Signals Bearish Outlook

“Stellar (XLM) is trading around $0.408, down 3.9% after failing to break $0.42. If it falls below $0.402, the correction could extend to $0.395.”
– @johnmorganFL (2.1M followers · 1.2M impressions · 2025-08-18 07:54 UTC)
View original post
What this means: Traders are cautious in the short term, closely watching the $0.40 to $0.42 range for clues on the next move.

2. @argosaki: Partnerships with Visa and MoneyGram Boost Adoption Prospects

“XLM has partnered with Visa and MoneyGram. Its compliance with ISO 20022 standards positions it well for global payment systems.”
– @argosaki (89K followers · 320K impressions · 2025-10-06 01:03 UTC)
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What this means: These partnerships are positive for wider adoption. However, a recent 6% sell-off by institutions on October 17 shows some investors are taking profits.

3. @EGRAG CRYPTO: $7.20 Price Target Is Controversial

“If Stellar closes the month above $0.55, it could trigger a ‘cup-and-handle’ breakout pattern aiming for $7.20.”
– @EGRAG CRYPTO (CMC post · 45K impressions · 2025-08-14 02:33 UTC)
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What this means: This optimistic forecast depends on Stellar holding support at $0.20 and Bitcoin’s market remaining stable. Some see this as overly hopeful.

Conclusion

The outlook for Stellar (XLM) is mixed. On one hand, the Protocol 23 upgrade and major partnerships suggest growth potential. On the other hand, technical resistance and broader market risks create uncertainty. Keep an eye on the $0.40 support level this week—if it holds, momentum could pick up; if it breaks, prices might test $0.30. For investors, the key question is whether institutional buying can balance out retail selling pressure.

What is the latest news about XLM?

Stellar is experiencing mixed signals as network upgrades meet market challenges. Here’s the latest update:

1. Institutional Sell-Off (October 17, 2025) – XLM dropped 6% due to significant profit-taking by large investors.
2. $140M Open Interest Increase (October 17, 2025) – Traders are betting on a rebound despite the price drop.
3. Launch of MIRAI-X Tokenized Assets (October 16, 2025) – Stellar is powering a $5.7 billion real estate project in the UAE.

In-Depth Look

1. Institutional Sell-Off (October 17, 2025)

What happened: On October 17, XLM’s price fell by 6.25% to $0.30 as big investors sold off their holdings, with $91 million traded during the busiest hours. This followed resistance at $0.31, indicating that the drop was due to planned profit-taking rather than panic selling by everyday investors. Stellar’s recent Protocol 23 upgrade, which has been live since September, increased the network’s transaction capacity to 5,000 operations per second. However, the price movement didn’t reflect these technical improvements.
What it means: In the short term, this is a bearish sign as institutions adjust their portfolios. But in the long term, the upgrade supports more business use cases, which is positive for Stellar. The $0.29 price level is an important support to watch.
(Yahoo Finance)

2. $140M Open Interest Increase (October 17, 2025)

What happened: Even though XLM’s price dropped 7.65% over 24 hours, the open interest (the total value of outstanding contracts) over four hours rose by 1.16% to $140 million. Traders on Binance led bullish bets with $37.6 million, and derivatives trading volume jumped 49% to $420 million. Year-to-date, XLM has outperformed Bitcoin, gaining 288% compared to Bitcoin’s 88%.
What it means: This shows that some traders are optimistic and expect the price to bounce back. If XLM can break above $0.31 and hold, it could confirm a bullish trend aiming for $0.40.
(U.Today)

3. Launch of MIRAI-X Tokenized Assets (October 16, 2025)

What happened: Assets Advisors Capital introduced MIRAI-X, a platform built on Stellar that allows tokenization of major assets like Dubai’s $5.7 billion Wynn Casino District. The platform uses smart contracts to ensure regulatory compliance and settles transactions with USDC, a stablecoin. It is designed mainly for institutional investors.
What it means: This is a positive development for Stellar’s adoption in real-world assets, complementing partnerships with companies like Visa and Franklin Templeton. Regulatory-compliant projects like this could drive steady demand for Stellar.
(The Block)

Conclusion

Stellar is facing short-term pressure from profit-taking but is supported by strong institutional partnerships and growing use in real-world assets. The key question is whether the scalability improvements from Protocol 23 will help the price catch up with the network’s growth.

What is expected in the development of XLM?

Stellar’s roadmap is focused on improving scalability, expanding decentralized finance (DeFi), and increasing adoption by businesses:

1. Protocol 24 Upgrade (Q4 2025) – Adding privacy features using zero-knowledge proofs.
2. 5,000 Transactions Per Second (TPS) & 2.5-Second Ledger Finality (2025) – Enhancing speed and reliability for large-scale use.
3. PYUSD Stablecoin Integration (Q4 2025) – Pending approval from New York’s financial regulator.
4. $1.5 Billion DeFi Total Value Locked (TVL) Goal (2025) – Growing real-world asset and liquidity projects.

Deep Dive

1. Protocol 24 Upgrade (Q4 2025)

Overview:
Building on the current Protocol 23, which supports parallel smart contracts (PaulGoldEagle), Protocol 24 will introduce privacy through zero-knowledge proofs (ZKPs). This technology allows transactions to be verified without revealing sensitive details, making it attractive for regulated financial institutions.

What this means:

• Positive: Positions Stellar as a privacy-friendly platform suitable for confidential financial activities like secure settlements and compliant asset issuance.
• Potential Challenges: Delays in implementing ZKPs or regulatory concerns could slow down adoption.

2. 5,000 TPS & 2.5-Second Ledger Finality (2025)

Overview:
Stellar plans to boost its transaction speed to 5,000 TPS and reduce the time it takes to finalize transactions to 2.5 seconds. This will be achieved by improving Soroban smart contracts and streamlining how the network processes transactions (CoinDesk).

What this means:

• Positive: Stellar could compete with fast networks like Solana and payment giants like Visa, making it suitable for high-volume uses such as micropayments.
• Neutral: Maintaining this performance requires ongoing developer support to keep the network stable under heavy use.

3. PYUSD Stablecoin Integration (Q4 2025)

Overview:
PayPal’s PYUSD stablecoin is set to be integrated into Stellar once it receives approval from the New York Department of Financial Services (NewsBTC).

What this means:

• Positive: This integration could connect over 435 million PayPal users to Stellar, increasing liquidity for stablecoins like USDC and PYUSD.
• Potential Challenges: Regulatory delays or competition from other partnerships (like Ripple) might reduce the impact.

4. $1.5 Billion DeFi TVL Target (2025)

Overview:
Stellar aims to increase the total value locked (TVL) in its DeFi ecosystem and real-world assets (RWAs) to $1.5 billion. This includes projects like Blend, which currently holds $32 million, and Franklin Templeton’s $522 million tokenized funds (Alearesearch).

What this means:

• Positive: Attracting institutional investors will help Stellar expand beyond just cross-border payments.
• Neutral: Achieving this goal depends on the overall health of the crypto market and demand for investment yields.

Conclusion

Stellar’s roadmap combines important technical improvements (like Protocol 24 and increased TPS) with strategic partnerships (such as PYUSD and real-world asset projects) to strengthen its position in regulated, high-speed finance. While these developments are promising, challenges related to scaling and regulation will be key factors to watch.

Will Stellar’s new privacy features successfully navigate regulatory hurdles in 2026?

What updates are there in the XLM code base?

Stellar recently launched Protocol 23 and updated its tools to better support decentralized finance (DeFi) and real-world assets (RWA).

1. Protocol 23 “Whisk” Upgrade (September 5, 2025) – Enables smart contracts to run in parallel, lowers fees, and standardizes event tracking.
2. Stellar Core v23.0.0rc2 (July 8, 2025) – Adds state storage, improves Soroban smart contract performance, and prepares the network for the new protocol.
3. Zero-Knowledge (zk) Infrastructure Integration (September 18, 2025) – Introduces cross-chain proofs with Nethermind and Wormhole for better privacy and interoperability.

Deep Dive

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

What it is: This upgrade allows Soroban smart contracts to process transactions at the same time, increasing speed to 5,000 transactions per second (TPS). It also standardizes how asset events are recorded, making it easier for apps to track token movements on Stellar and Soroban. Plus, it cuts costs by storing contract data in faster memory and adds a shared cache for better performance.

Why it matters: This makes Stellar more scalable and affordable, which is great for institutions using DeFi and tokenizing real-world assets. Developers can now build more complex apps with real-time tracking.
(Source)

2. Stellar Core v23.0.0rc2 (July 8, 2025)

What it is: This is a release candidate preparing the network for Protocol 23. It includes important fixes and improvements like saving Soroban’s state to memory, lowering costs for contract calls, and increasing CPU capacity per ledger. The network approved this update on August 14, 2025.

Why it matters: While this update doesn’t immediately affect XLM’s price, it improves network stability and efficiency. Node operators had to upgrade, and developers now have better tools to manage fees and handle more transactions.
(Source)

3. Zero-Knowledge (zk) Infrastructure Integration (September 18, 2025)

What it is: This integration adds zero-knowledge proof technology, allowing Stellar to securely connect with other blockchains like Ethereum through the Wormhole bridge. It also enables privacy-focused apps that can share verified data across chains without revealing sensitive information.

Why it matters: This boosts Stellar’s interoperability and attracts projects focused on privacy. The new technology supports confidential asset transfers and other innovative use cases.
(Source)

Conclusion

Stellar is evolving into a fast, reliable platform for regulated DeFi and real-world assets. Protocol 23 and zk upgrades improve scalability and cross-chain capabilities. Developers and users should watch how Soroban adoption grows and how real-world asset activity develops on Stellar. Looking ahead, Protocol 24’s privacy features could make Stellar even more competitive in 2026.