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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.