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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.
$STX poised for long-term growth following Nakamoto upgrade - 1"> 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.