XLM price nears breakout as key metric nears 100m milestone ahead of protocol upgrade

Stellar Lumens is on a tear, nearly doubling in value since July as record network activity and an upcoming protocol upgrade fuel hopes for further gains above $0.70.

XLM price technical analysis

The Stellar Lumens (XLM) token was trading at $0.43 on Saturday, Aug. 16, giving it a market capitalization of over $13 billion. It has jumped by 97% from its lowest level in July, with technicals and an upcoming upgrade pointing to more gains.

The three-day chart shows that Stellar price has formed several highly bullish patterns. It initially formed a double-bottom pattern at $0.2178, its lowest level in April and June, and a neckline at $0.3350. A double-bottom pattern often leads to more gains. 

The XLM price is now forming a bullish pennant pattern, which is made up of a vertical line and a symmetrical triangle. The two lines of this triangle are about to converge, which is then followed by a strong breakout. 

The price target in a bullish pennant is estimated by first measuring the flagpole’ height, which is about 57%. Measuring the same distance from the breakout point gives it a target price of $0.7270, up by over 50% from the current level. 

These gains will be confirmed when the price rises above the crucial resistance level at $0.6356, its highest level in November last year. A plunge below the support at $0.3350 will invalidate the bullish XLM price forecast. 

Key catalysts for Stellar Lumens

XLM price has three major catalysts that will push it higher in the near term. First, smart contract transactions on the network are growing, with the network gaining market share in areas like lending, staking, and lending. 

These transactions recently crossed the 100 million milestone, with the total value locked in decentralized finance reaching a record high of $150 million. 

Nansen data shows that Stellar’s transactions increased by 11% in the last 30 days to 81.85 million, while active addresses rose by 49% to 493,774. 

The other bullish catalyst for the XLM price is that it is achieving its goal of simplifying payments. Its stablecoin supply jumped by 10% in the last 30 days to a record high of $222 million. This is notable since Stellar’s goal is to disrupt the payment industry by reducing transaction costs.

Third, Stellar is working on the upcoming Protocol 23 upgrade, which is expected to go live in September. Its top features will be optimizing its Soroban transactions and introducing parallel transaction execution. Tokens often jump ahead of a significant upgrade.