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- Stacks Begins Nakamoto Upgrade Amidst STX Token Decline.
- STX Faces Pressure as Stacks Launches Nakamoto Upgrade.
Bitcoin layer 2 network, Stacks, has captured community attention with its latest Nakamoto upgrade, designed to accelerate transaction speeds. Despite this significant development, the Stacks native token (STX) has seen a 6% decline in the past 24 hours, alongside a 10% drop in trading volume.
The Nakamoto upgrade, named after Bitcoin‘s enigmatic creator, Satoshi Nakamoto, is a step in decoupling Stacks’ block production schedule from Bitcoin’s. Network operators now have a two-week window to implement the upgrade, culminating in a hard fork to finalize the process.
Moreover, this upgrade introduces a new method of block production via the proof-of-transfer consensus algorithm, where users burn Bitcoin (BTC) to mine Stacks blocks, earning rewards in return. The upgrade, which began its implementation in April, also brings online block “signers” to validate transaction tenures.
Stacks aims to enhance Bitcoin’s utility by enabling smart contracts and decentralized finance (DeFi) functionalities, using Bitcoin as a foundational layer. A significant component of this vision is the rollout of sBTC, a bridging asset that allows users to integrate their BTC into the Stacks economy.
What is Ahead For STX?
However, STX is currently entrenched in a bearish trend, with the 9-day Exponential Moving Average at $1.67 and a daily Relative Strength Index (RSI) of 51, indicating neutral market conditions. Should bullish momentum return, STX faces resistance at $1.93 and $2.05. Conversely, continued bearish sentiment could see the token drop to $1.51, with further support at $1.33.
As STX navigates these critical resistance levels, the coming days will be crucial in determining whether the token can sustain its momentum or face further declines. Traders and investors are keeping a close watch for signs of market reversal or continued strength.