XLM eyes $0.40 ahead of Stellar’s Protocol 23 upgrade

Key takeaways

• The broader crypto market has recovered from Monday’s low and now eyes new highs.
• XLM is trading above $0.35 ahead of the network’s key upgrade.

Stellar Lumens to implement Protocol 23 upgrade

XLM, the native coin of the Stellar Lumens blockchain, is trading in the green after a poor start to the week. Its poor performance earlier this week coincides with Bitcoin and other leading cryptocurrencies underperforming.

However, XLM is now trading above $0.35 after defending the $0.34 support over the weekend. The coin could rally higher ahead of a key network upgrade. Stellar’s Protocol 23 upgrade aims to modernize network infrastructure and expand interoperability.

According to the team, this upgrade is a step toward broadening Stellar’s utility for real-world assets (RWA). The RWA sector market on Stellar is now worth over $460 million, and the team expects it to grow bigger once the new protocol goes live. 

With the upgrade and the increased RWA market on Stellar, its native token could rally higher over the coming days and weeks.

XLM targets $0.40 as a bullish pattern forms

The XLM/USD 4-hour chart remains bullish and efficient as XLM has rallied in recent weeks. The price established fundamental support at $0.344 during heightened selling pressure on Monday. 

The market has now embarked on a recovery, with accumulation currently ongoing between $0.35 and $0.36. The RSI of 52 shows that the bullish momentum is returning, while the MACD lines are about to cross into the positive zone. 

If the recovery continues, XLM could overtake the $0.37 resistance over the next few hours and rally towards the $0.40 psychological level. However, breakout potential above $0.37 resistance depends upon sustained volume validation.

If the market fails to rally higher, XLM could face a rejection and drop to the $0.34 support level once again. An extended bearish run would see XLM fill the FVG gap and drop to the $0.29 support for the first time since July.