- Stacks price is bullish despite overall bearishness in the wider market, thanks to extremely high demand in Bitcoin block space.
- STX could rise 50% as the network works to improve the expressive smart contract capabilities of the BTC network.
- The growing BTC network demand provides an opportunity for Bitcoin L2 platforms like Stacks to build.
Stacks (STX) price is bullish despite most players in the crypto arena recording losses. The fresh uptick is attributed to the recent debacle on the Bitcoin backlog, where the Binance exchange reported congestion on the TC network.
We've temporarily closed #BTC withdrawals due to the large volume of pending transactions.
— Binance (@binance) May 8, 2023
Our team is currently working on a fix and will reopen $BTC withdrawals as soon as possible.
Rest assured, funds are SAFU.
Stacks is a Bitcoin layer for smart contracts and decentralized applications (dApps), enabling the use of BTC as an asset and settling transactions on the Bitcoin blockchain. As confirmed by Glassnode, Bitcoin is witnessing extremely high block space demand, so much so that the Binance exchange had to pause BTC withdrawals twice. This was caused by BRC-20 tokens using text-based inscriptions and ordinals.
Also Read: Binance suspends then resumes Bitcoin withdrawals in two hours: Theories and market impact
Stacks price primed for a 50% rally
Stacks, among other Bitcoin Layer 2 protocols like Lightning and Rootstock, have gained attention lately in the wake of the BTC network congestion, presenting an opportunity for the L2s to build. Citing Stacks co-creator Muneeb Ali, this marks the beginning of the arms race to build the best Bitcoin L2s.
Bitcoin fees just hit a new record. Up 500x from just a few months ago.
— muneeb.btc (@muneeb) May 7, 2023
Officially marks the start of the arms race to build the best Bitcoin L2s.
Lightning, Stacks, and Rootstock have a head start. Time to build
As Stacks attempts to improve the Bitcoin network’s expressive smart contract capabilities through L2 technology, STX price could be primed for a northbound move. At the time of writing, the Bitcoin L2 token is auctioning at $0.77, a daily rise of 7%. The token is up 1.5% on the hour and 7.1% over the last week.
The Fair Value Gap (FVG) on the one-day timeframe between the March 23 lower wick and March 25 upper wick has left an imbalance that has to be filled. Fair Value Gaps are created within a three-candle sequence and are commonly visualized on the chart as a large candle whose neighboring candles’ upper and lower wicks do not fully overlap the large candle.
With this vacuum acting as a magnet, Stacks price could rise 53% to tag the $1.17 resistance level, thereby filling the inefficiency highlighted in pink. Notably, this speculation hinges upon whether the current Bitcoin network demand will be sustained long enough.
In a highly bullish case, Stacks price could extend a leg up to collect buy-side liquidity above the aforementioned level.
The Relative Strength Index (RSI) trajectory upholds the bullish thesis, tipping upwards and about to cross into the positive zone. This hints at more buyers approaching the STX market and Stacks price could increase.
STX/USDT 1-Day Chart
On the downside, if profit takers begin hedging their STX holdings, Stacks price could switch to the gains-shedding gear. The move could see the altcoin drop toward the immediate support level at $0.67 or, in the dire case, fall below this level toward the $0.28 support floor.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Recommended Content
Editors’ Picks
Ripple's XRP set sights on $1.100 following renewed investor interest
Ripple's XRP rallied nearly 20% on Tuesday, defying the correction seen in Bitcoin and Ethereum as investors seem to be flocking toward the remittance-based token.
Dogecoin Price Prediction: Could DOGE ETF spark new all-time high after 130% rise?
Dogecoin rose over 15% on Tuesday as traders anticipate a price move toward the $1 threshold following Bloomberg analyst Eric Balchunas's post regarding a DOGE exchange-traded fund.
Hedera's HBAR rallies nearly 20% as Canary Capital files for HBAR ETF
Hedera's HBAR is up nearly 20% on Tuesday as Canary Capital submitted an S-1 registration to the US Securities & Exchange Commission for an HBAR exchange-traded fund.
Ethereum Price Forecast: ETH down despite hype from Beam Chain unveil
Ethereum is down 1% on Tuesday despite developer Justin Drake proposing the Beam Chain, a new consensus layer that aims to ship a series of changes that will fast-track the Main chain's roadmap to faster block times and quantum resistance.
Bitcoin: Further upside likely after hitting new all-time high
Bitcoin hit a fresh high of $76,849 on Thursday as crypto-friendly candidate Donald Trump won the US presidential election. Institutional demand returned with the highest single-day inflow on Thursday since the ETFs’ launch in January.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.