Stacks (STX) Climbs Another 9% Amid Bitcoin Rally, How High Can It Go?

Stacks (STX) Climbs Another 9% Amid Bitcoin Rally, How High Can It Go?

Time Stamp: March 20, 2023 12:15 PM
Source Node: 2020829

The Stacks (STX) bulls are currently riding the Bitcoin rally. Within the last seven days, the Stacks token is up 70%, 255% over the last 30 days, and a whopping 456% over the last three months. Without a doubt, the layer-2 technology has benefited from Bitcoin’s strength during the recent move; BTC dominance has increased from around 40% at the beginning of the year to nearly 46% at the moment.

With the brewing banking crisis and optimism towards Bitcoin, there is a strong case for Stacks to continue rising in the medium term. However, the 1-week chart shows that STX is approaching an important level where it could face a strong headwind.

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 stall and a pullback may occur. This is also supported by the overbought RSI on the weekly chart at 83.

In the worst case scenario, 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) would be the next targets for a bull market rally.

Before tackling the all-time high of $3.38 from November 2021, the price level of $2.70 would be the last major hurdle.

Stacks STX price
Stacks continues to rally, 1-week chart | Source: STXUSD on TradingView.com

Looking at the 1-day chart reveals that Stacks bulls are showing some hesitation at the moment. The range between $1.30 and $1.32 is the area which is preventing a push towards the 38.2% Fibonacci retracement level at $1.40 in the weekly chart for the moment.

A consolidation down to $1.09 would be healthy to bring down the RSI of 72 in the daily chart, before a bigger rally can continue.

Stacks STX price
STX price, 1-day chart | Source: STXUSD on TradingView.com

Stacks Exhibits Persistent Strong Narrative In 2023

The much anticipated Stacks 2.1 update was successfully activated yesterday. It introduces several improvements to stacking that will eliminate inefficient or confusing aspects of stacking, 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.

The 2.1 upgrade also lowers the barrier the entry to mining by providing the two key building blocks for decentralized mining pools. It provides miners with 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.

Subnets are scheduled to be enabled in the second quarter of 2023. These are a layer 2 scaling solution in the Stacks blockchain that provide low latency and high throughput for workloads. It enables developers to build fast and reliable experiences.

In the fourth quarter of 2023, the eagerly awaited Nakamoto release is expected to arrive. The Nakamoto release adds important capabilities that will increase the performance of stacks as a Bitcoin layer. Additionally, it will introduce a trustless Bitcoin peg (sBTC).

Featured image from iStock, charts from TradingView.com

Time Stamp:

More from NewsBTC