Outside Source
Stacks, a Bitcoin layer-2 solution, is currently garnering attention as its latest developments hint at substantial long-term growth potential.
Following the recent Nakamoto upgrade on Oct. 29, 2024, which promises faster transactions and greater scalability for Stacks (STX), the network experienced a surge in activity, per data from Artemis.
According to CEX.IO analysts, Stacks’ active addresses grew by 97%, and transactions rose by 94%. The Nakamoto upgrade also sets the stage for the upcoming sBTC release, a feature that will allow smart contracts anchored on Bitcoin (BTC).
sBTC will address Bitcoin’s previous limitations in the space by facilitating DeFi functions on the network. This could make Stacks a major player in Bitcoin’s growing DeFi space, which has already seen growth of over 770% in 2024, per the analysis.
However, despite a two-fold rise this year, Stacks has not recorded as much growth as other Bitcoin L2 solutions in terms of total value locked. For instance, Core’s TVL has risen at a faster rate, while emerging platforms like Merlin Chain and Bitlayer have made more rapid gains.
STX price action
In terms of price action, analysts at CEX.IO reveal that STX has shown promising signs following the Nakamoto upgrade. The token’s value recently increased by 11%, revisiting a resistance level that has lasted for a month.
Despite some fluctuations in momentum on the four-hour chart, which indicate potential near-term corrections to support levels at $0.75 and $0.70, the weekly indicators present more bullish signs, the analysis revealed.
Notably, STX is down 6.69% over the past 24 hours and is trading at $1.71 at the time of writing. This correction follows a recent spike to $1.9 on Oct. 29, and comes on the back of the broader market retracement. Stacks is also down 6.79% this October.
Meanwhile, per the CEX.IO report, both STX and BTC have recently formed a MACD bullish crossover, a signal that often triggers prolonged rallies, with STX boasting a high price correlation with Bitcoin.
However, the Lead Analyst at CEX.IO, Illia Otychenko, argues that given STX’s relatively small market size, it often experiences greater price swings, typically five to six times more. This trend played out during the first phase of the ongoing bull run, as BTC rallied 172%, while STX spiked by 739% within the same timeframe.
With Bitcoin projected to reach $200,000 by Bitwise CIO Matt Hougan, if STX repeats this pattern, it could record a massive uptrend. Should a rebound gain momentum, its first major resistance level would come in at the $2.033 mark.
This article first appeared at crypto.news
