XLM price is stable before Stellar resets Protocol 23 Testnet

In the last 5 trading sessions, the price of XLM has barely experienced any strong fluctuations, only oscillating within a narrow range.

This development comes as Stellar is preparing to reach an important milestone: the reset and stable release of Protocol 23 Testnet, scheduled for August 14.

Protocol 23 ready for Testnet reset

The upgrade to Stellar's Protocol 23, which was first deployed on Testnet on July 17, is expected to launch on the mainnet in September.

According to the blog post on June 10, Protocol 23 introduces 8 Core Improvement Proposals aimed at enhancing the performance, capabilities of smart contracts, and tools for Stellar developers.

Notable points include: Soroban smart contracts are faster and cheaper due to storage in memory and parallel processing; unified event streams make tracking easier; new functions for more efficient data management; along with the ability to configure the consensus mechanism to reduce latency on the ledger.

The reset and stable release of the Testnet is scheduled to take place on August 14.

The rise of XLM faces the risk of losing momentum

Before this reset, the price performance of XLM was still quite sluggish. Although the price has increased by 4% over the past day, this movement is accompanied by a decrease in trading volume. This bearish divergence indicates that the upward momentum is not driven by actual demand.

Price and Trading Volume of XLM | Source: SantimentTypically, when prices rise but trading volumes decrease, it reflects weak market participation. Such increases are often unsustainable and prone to reversal when selling pressure returns, putting XLM at risk of losing all its recent gains.

In addition, data from Coinglass shows that the capital inflow into the spot market for XLM is weakening, with a net outflow of 1.41 million USD in a day, reinforcing the view that demand for XLM is decreasing and selling pressure is increasing.

Cash flow in/out of the XLM spot market | Source: Coinglass## Can the bulls maintain the support level?

The increasing selling pressure risks pulling XLM below the important support level of $0.42. In this case, the token price could slide down to $0.39 if profit-taking continues.

Technical analysis of XLM | Source: TradingViewConversely, if the upward momentum is strong, the token may break through the resistance level of $0.4689, opening up the opportunity for a price surge towards $0.5206.

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