Stacker (STX) Climbs 9% Amid Bitcoin Rally, How High Can It Go?
The Stacks (STX) bulls are currently riding the Bitcoin rally. In the last seven days, the Stacks token has increased by 70%, 255% in the last 30 days, and a whopping 456% in the last three months. Arguably, the layer-2 technology has benefited from Bitcoin’s strength during the latest move; BTC dominance has increased from around 40% at the beginning of the year to almost 46% currently.
With the looming banking crisis and optimism towards Bitcoin, there is a strong case for Stacks to continue to rise in the medium term. However, the 1-week chart shows that STX is approaching an important level where it could face strong headwinds.
At press time, Stacks was trading at $1.22 and targeting the 38.2% Fibonacci retracement level at $1.40. At this price, the STX bulls may stop and a pullback may occur. This is also supported by the overbought RSI on the weekly chart at 83.
At worst, a retracement towards the 23.6% level at $0.94 could be in play, which could provide an excellent buying opportunity for bulls. However, if Stacks blows past the $1.40 level with ease, $1.78 (50% Fibonacci) and $2.16 (61.8% Fibonacci) will be the next targets for a bull market rally.
Before tackling the $3.38 record from November 2021, the $2.70 price level will be the last major hurdle.
Looking at the 1-day chart reveals that the Stacks bulls are showing some hesitancy at the moment. The area between $1.30 and $1.32 is the area preventing a push towards the 38.2% Fibonacci retracement level at $1.40 on the weekly chart at the moment.
A consolidation down to $1.09 would be healthy to bring down the RSI at 72 on the daily chart, before a major rally could continue.
Stacks shows continued strong narrative in 2023
The long awaited Stacks 2.1 update was successfully activated yesterday. It introduces several improvements to staking that will eliminate inefficient or confusing aspects of staking, PoX rewards, and the security mechanism.
In addition, Clarity has been enhanced with a wealth of new keywords, including writing Clarity contracts that respond to Bitcoin transactions and writing Clarity contracts that ingest off-chain data.
🚨 #Stacks 2.1 Activated 🚨
Strengthen the connection to #Bitcoin
⭐️ Stacking improvements
⭐️ New clarity features
⭐️ Better bridges
⭐️ Decentralized mining
⭐️ #Bitcoin-native assetsFind out more 👇 1/7
— stacks.btc (@stacks) March 19, 2023
The 2.1 upgrade also lowers the entry barrier to mining by providing the two key building blocks for decentralized mining pools. It gives miners the ability to mine with a native Segwit or Taproot UTXO. This not only reduces the Bitcoin transaction fee by about 25%, but is also an important building block for decentralized mining pools.
Subnet is scheduled to be activated in the second quarter of 2023. This is a layer 2 scaling solution in the Stacks blockchain that provides low latency and high throughput for workloads. It enables developers to build fast and reliable experiences.
In the fourth quarter of 2023, the long-awaited Nakamoto release is expected. The Nakamoto release adds important features that will increase the performance of stacks like a Bitcoin layer. Additionally, it will introduce a trustless Bitcoin peg (sBTC).
Featured image from iStock, charts from TradingView.com
