Stellar (XLM) surges 40% on bullish breakout and protocol upgrade optimism

Stellar (XLM) has surged by 40%, driven by a bullish breakout that has sparked a rally in the cryptocurrency market. The surge was triggered by a breakout above the $0.32 resistance level, which had previously acted as a downtrend for XLM. This breakout has shifted market sentiment towards Stellar, with investors showing increased confidence in its growth potential.

The rally faced a potential pullback at the $0.42 resistance level, but the overall sentiment remained positive. The breakout and subsequent rally indicate a strong upward trend for XLM, with analysts predicting a potential move towards $0.6374. This rally is not driven by any specific news or events but rather by the market's response to the technical breakout.

The surge in XLM's price highlights the volatility and potential for significant gains in the cryptocurrency market. It also underscores the importance of technical analysis in identifying potential breakouts and rallies. The breakout from two key technical formations—a falling wedge and a descending channel—has signaled a strong upward trend for XLM.

The first breakout occurred when XLM broke out of a falling wedge formation that had been in place since January 2025. This bullish setup typically indicates a price reversal, and in XLM's case, it worked perfectly. Following this breakout, the price entered another consolidation period inside a smaller descending channel. However, XLM quickly shattered this channel too, launching an even stronger breakout.

At the time of this breakout, XLM was trading at $0.25. Since then, the price has surged nearly 40%, reaching around $0.3963. The chart points to a projected upside of $0.6374, backed by past resistance levels. The clearly marked zones in the chart offer a roadmap for both new and experienced traders, capturing the price’s full journey—from support to consolidation and finally to breakout.

In addition to the technical breakouts, rising excitement over Stellar’s upcoming Protocol 23 upgrade is boosting optimism. The upgrade is scheduled for a vote on August 14, 2025, and proposes better transaction execution and state management on Soroban, Stellar’s smart contract platform. This upgrade aims to enhance smart contract speed and network performance, further fueling investor demand.

Moreover, Stellar continues to expand its real-world use. Franklin Templeton recently tokenized $446 million in U.S. Treasuries on the Stellar blockchain, signaling growing institutional trust in the network’s stability. This move highlights the increasing real-world and institutional trust in Stellar’s blockchain, further boosting investor confidence.

Furthermore, the Total Value Locked (TVL) in Stellar’s decentralized finance (DeFi) ecosystem has seen a significant increase. DeFiLlama reported a 22% spike in Stellar’s TVL within 24 hours, pushing it to $120.25 million. This increase in TVL indicates rising demand and trust in Stellar’s DeFi ecosystem, further supporting the rally in XLM’s price.

In summary, the surge in Stellar (XLM) is driven by a combination of technical breakouts, upcoming protocol upgrades, and increasing real-world and institutional trust. The rally highlights the potential for significant gains in the cryptocurrency market and underscores the importance of technical analysis in identifying potential breakouts and rallies. As Stellar continues to expand its use cases and improve its network performance, investor demand is likely to remain strong, supporting further price appreciation for XLM.