Is there any possibility to receive the Windows 10 mobile update on a Lumia 535?
I would say your phone will receive the update to Windows 10 mobile, since it is already supported by the Windows Mobile Insider Preview.
Here's the list of handsets Microsoft has confirmed would receive the WIndows Phone 10 update at the time of release.
Lumia 430 Lumia 435 Lumia 532 Lumia 535 Lumia 540 Lumia 640 Lumia 640 XL Lumia 735 Lumia 830 Lumia 930
There will be more handsets added later.
I am using W10M on lumia 535 and very happy with that. Although I should not ignore minor bugs but there is really no data loss or other severe bugs I suffered. Infact it is much more fluent, easy-to-use and comfortable (according to my opinion :D). If you want to update on W10M and don't want any data loss then please Do not use insider updates. You can easily use Upgrade Advisor app for updation. Just follow screen instructions and you'll be done. I know a large number of rumors do exist about upgradation but if you follow these steps you'll be just fine. I am also attatching screenshots for your convinience.