Stellar Faces Selling Pressure Despite Protocol 27 Upgrade
Stellar's recent protocol upgrade has strengthened the network's capabilities, but the market has yet to reward the development. XLM remains under selling pressure, with technical indicators, derivatives positioning and broader market sentiment pointing to a cautious near-term outlook.
Summary:
- Stellar activated Protocol 27 on mainnet, introducing authentication delegation and smart contract address credentials.
- XLM remains below its 20, 50, 100 and 200-period moving averages, keeping the short-term trend bearish.
- Derivatives data shows muted positioning, with declining futures volume and limited conviction from traders.
- Immediate support sits near $0.180, while recovery attempts face resistance around $0.181-$0.186.
The token is trading around $0.180, extending a multi-day decline that has left it below several key moving averages. While Protocol 27 introduces new functionality for developers and institutions, macroeconomic uncertainty and weak risk appetite continue to outweigh network-specific catalysts.
Protocol Upgrade Improves the Network, Not the Price
According to the official announcement in X, Stellar successfully activated Protocol 27 (“Zipper”) on mainnet, introducing authentication delegation for custom accounts and address-bound credentials for smart contracts.
Zipper (Protocol 27) is now live on Mainnet.
The protocol upgrade introduces authentication delegation for custom accounts and address-bound smart contract address credentials. pic.twitter.com/kDZYrTLGDn
— Stellar (@StellarOrg) July 8, 2026
The upgrade is designed to make application development more flexible by allowing users to delegate authentication without exposing private keys, while enabling contracts to verify address-specific credentials more efficiently. These features are expected to benefit wallet providers, payment applications and institutional developers building on Stellar.
Fundamentally, the upgrade strengthens the network’s infrastructure rather than creating immediate demand for XLM. That distinction helps explain why the protocol launch has had little short-term impact on price action.
Technical Structure Remains Under Pressure
Despite the successful network upgrade, XLM continues trading within a well-defined short-term downtrend.
The chart shows XLM trading below all four major moving averages, reinforcing that the broader trend remains bearish. The first resistance lies near $0.189, where the 20, 50 and 100-period moving averages have converged. Above that, the 200-period moving average around $0.197 adds another layer of resistance, creating a zone that buyers would need to reclaim before a broader trend reversal could develop.
Several bearish order blocks remain positioned between $0.195 and $0.201, marking areas where sellers previously overwhelmed buying pressure and triggered sharp declines. Because these zones represent unfilled institutional supply, traders often monitor them for renewed selling if price rallies back into the area.
Unless Stellar breaks above the $0.189-$0.197 resistance cluster with rising trading volume, the current technical structure continues to favor sellers, while any recovery is likely to face resistance before challenging the early July highs.
Derivatives Positioning Shows Weak Conviction
Derivatives markets continue to reflect a cautious tone rather than aggressive positioning for a recovery.
According to the latest futures data from Coinglass, 24-hour futures volume has fallen 28.3% to $177.1 million, indicating speculative activity has slowed as traders step back from the market. By contrast, open interest has edged 0.16% higher to $176.7 million, suggesting existing positions remain open even as fresh participation declines.
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That combination is typically interpreted as holding existing exposure rather than establishing new directional bets. Traders are maintaining positions, but the lack of accompanying volume points to limited conviction behind either bulls or bears.
Positioning data paints a similarly mixed picture. The overall 24-hour long/short ratio stands at 0.99, indicating a slight bias toward short positions across the market. On Binance, retail accounts are even more defensive with a 0.90 long/short ratio, while top traders remain modestly net long, posting account and position ratios of 1.09 and 1.09, respectively. OKX traders are comparatively more bullish with a 1.70 account long/short ratio, although that optimism has yet to translate into broader market momentum.
Liquidation activity has also remained subdued. During the past hour, only $1,140 in long positions were liquidated, while the previous 12 hours saw $42,800 in total liquidations, including $35,600 in shorts. The relatively small liquidation figures suggest the current decline is being driven by steady selling rather than forced deleveraging.
Levels Worth Monitoring
The next few trading sessions are likely to revolve around several key technical levels.
Support
- $0.180-$0.181 (current support)
- $0.170-$0.171
- $0.166-$0.168 if selling pressure accelerates
Resistance
- $0.189-$0.190 (major moving average cluster)
- $0.197-$0.200 (200-day moving average and bearish order block zone)
- Above $0.200 if bullish momentum returns
A sustained move above the moving-average cluster would be the first indication that bearish momentum is beginning to weaken. Conversely, a decisive break below $0.180 could expose the lower support levels as sellers remain in control.
While Protocol 27 represents a meaningful step forward for Stellar’s long-term development, the market is currently prioritizing technical conditions and macroeconomic risk over protocol improvements. Until buyers reclaim key resistance levels and derivatives positioning strengthens, XLM is likely to remain vulnerable to additional downside despite improving network fundamentals.
The information presented in this article is intended for informational purposes only and should not be interpreted as financial, investment, or trading advice. Coinspress.com does not promote or advocate for any particular investment strategy, asset, or cryptocurrency project. Cryptocurrency markets are highly volatile and unpredictable – always perform your own research and seek guidance from a qualified financial professional before making any investment decisions.
Alexander Stefanov
Reporter at CoinsPress
Alex is Editor-in-Chief of Coinspress and co-founder of Millennial Media Group, with nearly a decade of experience covering financial markets - crypto first, then everything else. It started in 2016 with Bitcoin. Like most people at the time, he didn't fully understand it - so he kept digging. Blockchain, tokenomics, the projects, the cycles. That curiosity never stopped, and eventually pulled him into traditional markets too: equities, commodities, macro. Not because he left crypto behind, but because you can't properly understand one without the other. What drives him is straightforward: he wants to know why something is happening, not just that it's happening. Most market coverage stops at the headline - price up, price down, here's a chart. Alex finds that kind of reporting actively unhelpful. If you walk away from an article without understanding the mechanism behind the move, what did you actually learn? He holds a degree in Tourism from New Bulgarian University - not the most obvious path into financial markets, but markets have a way of pulling in people who are simply too curious to stay out. He has authored over 200 in-depth analyses and more than 10,000 articles across crypto and traditional finance. He still thinks every day in markets teaches him something new. That's probably why he hasn't stopped.
