Stellar (XLM) Price Prediction: Protocol 23 Testnet Reset Countdown, Volume-Price Divergence Warns of Pullback Risk

Stellar (XLM) has been in a narrow consolidation over the past five trading days. Although it slightly rose by 4% during the day, it was accompanied by a shrinking volume and a net outflow of $1.4 million, showing a clear divergence between volume and price signal. The key market turning point is approaching: the reset of Stellar Protocol 23 Testnet will be launched on August 14, and this upgrade will significantly enhance the performance of Soroban smart contracts through technologies such as memory storage and parallel execution. If the long positions cannot hold the $0.42 support, XLM may dip to $0.39; conversely, breaking through the $0.4689 resistance could open up space for an attack towards $0.5206.

[Technical Upgrade Focus: Detailed Explanation of Protocol 23 Testnet Reset]

(Santiment)

• Core Upgrade: Protocol 23 includes 8 Core Improvement Proposals (CIPs), focusing on enhancing network performance and developer experience:
  • Soroban smart contracts optimization: Using in-memory storage ( and parallel execution ), significantly reduces Gas fees and improves transaction speed.
  • Unified Event Streams (Unified Event Streams): Simplifies contract event tracking and improves development efficiency.
  • Enhanced Data Interaction: Added host function optimization on-chain data processing capabilities.
  • Configurable consensus settings: Reduce ledger latency and improve network response efficiency.
• Milestone Node: The Testnet was first deployed on July 17, reset and stable version released on August 14, paving the way for the mainnet upgrade in September.

[Market Performance: Volume-Price Divergence Exposes Weakness]

(Santiment)

• Price Stagnation: XLM has recently been in a narrow range fluctuation, with a 5-day amplitude of only 1.7%, reflecting a strong wait-and-see sentiment in the market.
• Danger Signal:
  • Volume Decline: A 4% rise within the day lacks volume support, forming a classic bearish volume-price divergence pattern.
  • Capital Outflow: Coinglass data shows that the XLM spot market has a net outflow of $1.4 million today, revealing a lack of buying momentum for the rebound.
  • Selling pressure intensifies: Capital outflows indicate increased selling pressure, which may suppress prices downward.

[Long and Short Strategy: Key Support and Resistance Level Analysis]

• Short positions scenario (higher probability):
  • If a divergence between volume and price triggers a sell-off, $0.42 support level will be tested.
  • Losing this position may trigger a dip towards $0.39 (a drop of about 7%).
• Long positions scenario (requires volume support):
  • If Protocol 23 is favorable and boosts the market, it needs to break through the $0.4689 resistance with volume.
  • After a successful breakout, the next target is $0.5206 (potential rise of 11%).

【Conclusion: The Race Between Technological Upgrades and Market Confidence】 The upgrade of Stellar Protocol 23 is significant on a technical level (especially the performance leap of Soroban smart contracts), but the current market has cast a vote of distrust with volume shrinking and capital outflow. As the final step before the upgrade, the Testnet reset's ability to become a catalyst for breaking the deadlock depends on two key factors:

1. Ecosystem Response: Are developers quickly adapting to new features and launching dApps that ignite the market?
2. Capital Reflow: Can the main funds end their wait-and-see stance and inject sustainable buying pressure into XLM?

In the short term, the $0.42 defense line is the last bastion for long positions. If it is breached, it may dip to $0.39 to seek support. Investors should closely monitor the on-chain activity data and volume changes after the Testnet reset on August 14, waiting for a clear signal of volume-price resonance. If the upgrade benefits cannot reverse the trend of capital outflow, XLM may be hard-pressed to escape the "buy the expectation, sell the fact" script.