Stacks [STX] is up more than 23%, leading all top 100 cryptos by market cap in terms of daily gains. The altcoin broke from a descending channel last week, thanks to a broader crypto market rebound.
Stacks, a Bitcoin [BTC] Layer 2 solution, is benefiting from the surge in prices of BTC. Bitcoin broke the $80,000 wall, prompting market-wide strength.
The continuous expansion of Bitcoin’s utility, especially the staking feature, has driven Stacks’ prices. In fact, the social mentions of STX increased by 31.7% this week, as per LunarCrush. Here is why:
Decoding Stacks’ network usage
Recently, Stacks announced that self-custodial Bitcoin staking would go live with the Genesis Bond on the 10th of September. The upgrade allows holders to earn BTC-denominated yield while their coins stay in Bitcoin’s base layer under their own keys.
Thus, Bitcoin holders will finally get productive capital without giving up custody or leaving BTC’s security models.
As a result, network usage has spiked as participants embrace this BTC utility. The Total Value Locked (TVL) slowly increased from $83 million to $102 million in six days.
However, DEX volume more than doubled in the same period. It grew from $960K to $2.18 million, as per DefiLlama.
To reinforce this spike in network usage, Chain Fees told a story. They increased by almost 10x, from $339 to $3,139, indicating network congestion.
On top of the fundamental upgrades, chain activity data indicates STX prices may continue rising. Is the technical outlook in agreement?
Can STX bulls print a new YTD high soon?
After the trend channel breakout, the uptrend hinged on staying above $0.2260, which is the support level coinciding with the 200-day EMA. Usually, staying above it means that the market structure is bullish.
However, previous STX crypto price prediction analysis indicated that $0.26 was a crucial level for STX’s rally. It stood as a key supply zone but has been truly tested by bulls who are determined to breach it. The previous $0.17 supply zone was easily taken out.
For STX to surpass this year’s peak at $0.4019, which is 38% away from current prices, it needs to clear the $0.26-$0.30 zone. Interestingly, the momentum is present and growing, with a reading of 0.1497.
Otherwise, if bears at the $0.30 supply zone outweigh bulls, STX may revert to its current mean position at $0.2260. If the 200-day EMA breaks down, it may invalidate the current bullish market structure shift.
Final Summary
- Stacks rallied over 23%, leading daily gains among the top 100 cryptos by market cap, thanks to the expanding utility of Bitcoin.
- STX flipped the 200-day EMA into support, but bulls were struggling to break the $0.30 supply zone.