XLM's Fate Hinges on $0.30 as Protocol 23 Looms

Stellar (XLM), a major player in the cryptocurrency market, is currently navigating a pivotal price level as it approaches a critical support zone near $0.32–$0.30. Analysts from Alpha Crypto Signal have highlighted that the recent rejection at the $0.45 resistance level has set the stage for a potential consolidation in the coming weeks. The token, which is currently trading at approximately $0.36 with a 24-hour volume of $288 million, has seen a 7% decline over the past week. The downward trend is supported by the broader technical indicators, including the exponential moving average (EMA 9) and the simple moving average (SMA 50), which are both positioned above the current price level.

As the price action moves toward the $0.32–$0.30 range, which has historically served as a foundation for rebounds, the market is closely watching for signs of accumulation. If buyers can defend this support area, a potential rebound toward $0.50–$0.55 could materialize. However, a decisive break below $0.30 would significantly weaken the bullish setup and increase the likelihood of further losses. The recent pullback has also been accompanied by a cooling of trading volumes, indicating a period of consolidation as traders await a clearer direction from the market.

The bearish pressure on XLM has also been reflected in the liquidation data. As of September 2, long liquidations reached over $192,900, significantly outpacing short liquidations of $55,750. The majority of these liquidations occurred on OKX, with $138,160 worth of long positions being closed. This trend mirrors the pullback from the $0.45 resistance level and emphasizes the importance of the $0.32–$0.30 support zone. The bearish momentum has been further reinforced by the technical indicators, such as the RSI and MACD, both of which are signaling a loss of upward momentum.

In addition to the technical and market sentiment factors, Stellar is preparing for a significant on-chain upgrade with Protocol 23, scheduled to go live on September 3. This update will introduce changes to the Stellar network, though its immediate impact on the price remains uncertain. The upgrade comes at a time when the token is nearing a critical support level, and traders will be closely monitoring whether XLM can stabilize and potentially launch a new breakout attempt. The timing of the upgrade adds an additional layer of uncertainty to the price action, as market participants await any potential positive catalysts.

The broader market context also reveals that XLM is not the only asset facing heightened volatility. The altcoin market as a whole is experiencing significant imbalances in liquidation maps, with several tokens, including Ethereum (ETH), XRP, and Pyth Network (PYTH), at risk of major liquidations in the first week of September. These imbalances highlight the fragile state of the market and underscore the potential for large-scale price swings. For XLM, the combination of a key support level and the upcoming protocol upgrade could either serve as a catalyst for a reversal or a precursor to further decline.

While the immediate outlook for XLM appears bearish, some analysts have identified a potential Elliott Wave setup that could offer a path for a bullish reversal. The wave count suggests that XLM may be completing a corrective pattern, with wave C measuring approximately 0.618 times the length of wave A. A breakout from a descending wedge on the daily chart would validate this structure and provide a bullish signal. However, the window for this scenario to materialize is closing, and the price must show significant strength in the short term to make a meaningful difference.

In conclusion, Stellar (XLM) is at a crossroads as it approaches a critical support zone. The bearish indicators, combined with rising long liquidations and a lack of upward momentum, paint a cautious picture. However, the possibility of a bullish reversal remains, contingent on a successful defense of the $0.32–$0.30 support level and a favorable outcome from the Protocol 23 upgrade. Traders will need to remain vigilant, as the coming weeks could determine whether XLM is poised for a major breakout or a deeper correction.

Source:

[1] Is Stellar (XLM) Setting Up for Its Next Major Breakout? (https://cryptopotato.com/is-stellar-xlm-setting-up-for-its-next-major-breakout/)

[2] Stellar (XLM) Price Loses Critical $0.39 Level (https://www.ccn.com/analysis/crypto/stellar-xlm-price-level-traders-drop/)

[3] Stellar Lumens (XLM) Price Today, XLM to USD Real- ... (https://stocktwits.com/symbol/XLM.X)