In July 2025, Stellar (XLM) shocked the market with a 75% rise, with the price soaring from $0.23 at the beginning of the month to a monthly high of $0.51, before entering a technical consolidation phase. As of August 4, the trading price of XLM stabilized around $0.42, with both bulls and bears fiercely contesting this key price level.
Technical analysts have keenly noticed: XLM has formed a bullish pennant on the daily chart — a typical trend continuation pattern. This pattern consists of the previous rapid rise’s "flagpole" (the surge in July) and the currently narrowing "triangular flag surface."
The upper and lower trendlines of the triangular flag are converging rapidly, indicating that the price is about to experience a directional breakout. If it successfully breaks through the upper resistance, historical data suggests that the upward target can refer to the height of the "flagpole," with the theoretical target pointing towards around $0.73.
Price Trend and Triangle Pattern: A Technical Structure Ready to Surge
The current consolidation of XLM is viewed by the ecological platform Scopuly as a "normal adjustment after a strong rise," rather than a signal of weakening. Key technical indicators also support this view:
- Strong support from moving averages: The price is steadily operating above the 50-day and 200-day moving averages, indicating that buyers dominate the medium to long-term trend.
- Neutral correction signal: The RSI indicator is at 54.2, having exited the overbought area but not yet entered the oversold zone. Although the MACD indicates weak short-term momentum, the extent is limited.
- Healthy trading volume: 24-hour trading volume remains at $28 million, indicating that market interest has not diminished.
The support line of this triangle pattern is currently located in the $0.40 - $0.36 range, while the resistance line has been pushed down to the $0.42 - $0.45 area. The direction of the breakout will determine the market trend in mid to late August.
Market sentiment: Derivatives data suggests bullish expectations
On-chain and derivative data further strengthen the possibility of a bullish breakout:
- Long-short ratio rises: According to Coinglass, the XLM long-short ratio reached 1.14, a new one-month high, indicating that more traders are betting on price rise.
- Funding rate direction: currently at 0.0085%, indicating that longs are paying shorts to maintain positions, which is a typical bullish sentiment signal.
- Retail speculation cools down: CryptoQuant data shows that retail speculative activity in the spot market is at a low level, which historically paves the way for institutional funds to enter and drives trending markets.
Protocol 23 upgrade: Significant fundamental catalyst
The core focus in August is on the upcoming Protocol 23 upgrade, which is widely seen as a potential catalyst for a price breakout:
- Smart contract capabilities leap: The upgrade will significantly improve transaction speed and reduce costs, directly enhancing. Stellar The competitiveness in the DeFi sector.
- Key timelines: The testnet has been deployed, and the mainnet validator voting is scheduled for August 26. If approved, it will officially go live on September 3.
- Big Tech Eco Boost: PayPal’s stablecoin PYUSD will be deeply integrated into the Stellar network after the upgrade, and Franklin Templeton has completed the tokenization of $446 million worth of government bonds on that chain.
These real-world application cases provide solid value support for XLM and are its core advantage that distinguishes it from pure meme coins.
The rationality of the $1.51 target: resonance of technical structure and market cycles.
Although the short-term targets focus on $0.52 (the breakout point of the triangle pattern) and $0.73 (the equal length target of the flagpole), targets of $1.51 or even higher are not a pipe dream:
- Macro Cycle Positioning: Veteran trader Peter Brandt pointed out that the XLM weekly chart has formed a potential "ascending triangle" and "cup and handle" pattern, both of which are classic long-term bullish structures. He clearly stated: a breakthrough of $1 will confirm the start of a multi-year bull market, with medium to long-term targets looking at the $7.2 area.
- Significance of historical resistance breakthrough: Since 2018, $1 has been a strong resistance level that XLM has found difficult to surpass. If an effective breakthrough is formed with the help of the current technical pattern and fundamental upgrades, the market’s psychological barrier will be breached, and short covering along with new buying may drive the price to rise rapidly.
- On-chain chip health: Currently, more than 80% of XLM addresses are in profit, and the proportion of long-term holders (>1 year) continues to rise. This "holding back" chip structure significantly reduces selling pressure, which is beneficial for the continued rise in price.
Short-term risk warning: key support levels must not be lost.
Despite the bright medium to long-term outlook, traders should be wary of the volatility risks in early August:
- Importance of Support Level: $0.42 is the current bullish-bearish watershed, and if it is lost, it may drop to $0.38 and $0.35 (50-day EMA).
- Open interest declines: CoinGlass data shows that the open interest (OI) of XLM has decreased from $588 million on July 18 to the current $351 million, a drop of $237 million. This indicates that some leveraged funds have withdrawn, which may weaken upward momentum in the short term.
- Overall market correlation: If the Bitcoin market experiences a sharp correction, it may cause XLM to temporarily break below the triangle pattern. Investors need to set strict stop-losses (such as below $0.35) to manage risks.
Future Outlook
As the voting date for Protocol 23 upgrade (August 26) approaches, the market’s attention on XLM continues to heat up. If the upgrade passes, Stellar will become a high-performance public chain supporting cross-border payments for PYUSD stablecoin and handling tokenized U.S. Treasury bonds, shifting its valuation logic from "technical experiment" to "financial infrastructure."
The rare resonance of technical and fundamental aspects makes the triangular pattern of XLM no longer just a game of lines. After breaking through $0.52, $1 will become a key psychological battleground for the bulls. Once breached, historical data shows that $1.51 and even $7.2 will no longer be a fantasy.
The most expensive mistake in the crypto world is often not missing out on a hundredfold coin, but rather discarding chips due to short-term fluctuations before the trend kicks off.
