The upcoming Whisk upgrade, can Stellar (XLM) break through to 0.4 USD?

Stellar (XLM) recorded a fall of more than 1% at the time of writing on Wednesday, reversing after a 3% increase the day before. This adjustment comes amid mixed signals from the derive market and technical sentiment, just before the Protocol 23 upgrade – also known as Whisk – is officially put to vote.

Whisk: A new step in the development of smart contracts for Stellar

The Stellar Protocol 23 upgrade, named Whisk, is expected to be a significant turning point, ushering in a new phase of development for the smart contract ecosystem on the Stellar network. This is not just a mere technical improvement, but also a foundation for Stellar to enhance its competitiveness in the rapidly changing blockchain field.

Whisk offers two standout features that have garnered special attention from the community. First, the merger event helps eliminate fragmentation between traditional operations and smart contracts, thereby optimizing the application development process. Second, parallel transactions allow for the processing of multiple transactions simultaneously, which increases speed and reduces costs, providing a smoother experience for users.

According to the announcement from Stellar Development Foundation (SDF), validators on the network will vote for the Whisk upgrade at 17:00 GMT, Wednesday ( which is 0:00 on September 4 according to Vietnam time). If approved, Whisk will officially be activated and deployed live on the mainnet, marking an important milestone in Stellar's development roadmap.

Risks from low interest rates and declining trading volume

Data from CoinGlass shows that the open contract (OI) of XLM has increased by 2% in the past 24 hours, reaching 310 million USD. However, the stability around the threshold of 300 million USD indicates a risk of stagnation, reflecting a decreasing level of interest from derivative traders.

The OI of XLM | Source: CoinglassNotably, the spot trading volume of XLM has also maintained a downward trend since peaking at 4.74 billion USD on July 14. If the volume and open interest do not show significant improvement, XLM may fall into inefficiency even when Whisk is launched.

XLM trading volume | Source: Coinglass## XLM at the crossroads: Important support and potential breakout

In the spot market, the price of XLM has retreated to 0.363 USD during Wednesday's session, yet it remains above the crucial support level of 0.361 USD – a level identified from the daily low on August 3rd. This movement comes after XLM unexpectedly recovered from a low of 0.344 USD on Monday, thereby ending a three-week consecutive fall and bringing hope to the buyers.

In the current context, 0.361 USD has become an important boundary shaping the short-term trend of XLM. If it holds above this level, the price has a chance to bounce back and aim towards the 0.4 USD area – the old bottom established on July 24. Conversely, if the support is broken, selling pressure may pull XLM back to retest the 0.344 USD bottom from the beginning of the week.

Technical indicators are also sending signals that reinforce the recovery outlook. The MACD on the 4-hour chart maintains an upward trend and is gradually approaching the zero line, indicating that momentum is leaning towards the buyers. At the same time, the RSI has recovered from the oversold area at the end of last week to a neutral level of 50, reflecting that buying pressure is gradually returning and the upward momentum may continue to be reinforced.

XLM Price Chart | Source: TradingViewOverall, Stellar is entering a critical phase as the Whisk upgrade is set to be activated. Although the derivatives market and trading volume show signs of stagnation, technical indicators still reflect the potential for price recovery.

Emma