Stacks (STX), an open-source blockchain networking aiming to bring dApps and smart contracts to Bitcoin, pumped 23.35% last night in a breakout swing.
Famous for becoming the first ever token to successfully qualify with the increasingly hostile US Securities and Exchange Commission – Stacks has sent shockwaves through the market in recent weeks posting seismic rallies.
As the premier Layer-2 for Bitcoin, Stacks price action has been ignited by massive excitement around something called Ordinals (Ordinal Inscription) – these are essentially NFTs built on Bitcoin Satoshis.
According to data from Dune, over 154,000 inscriptions have taken place already.
1/ Ultimate thread for @Stacks – The Uprising Bitcoin Layer
The Bitcoin narrative is here and bigger than ever; if you've been following $STX from the previous weeks, you're probably new and have found your way from #Ordinals. pic.twitter.com/dM3uQscFcV
— louiseivan (@louiseivanvp) February 23, 2023
Stacks is well position as a project to take advantage here. With a focus on developing dApps and smart contracts on Bitcoin, and network native STX which can be used to settle transaction fees across the open Stacks network (and also locked in DeFi products to earn BTC rewards).
Sunday 19 saw a jaw-dropping 110% pump that topped out at a high of $0.85 before moving down to consolidate above $0.60.
Consolidation was strong at this level posting a bullish double-bottom pattern over the course of this week.
This well-defended consolidatory structure gave legs to a shock 23.35% swing last night – which brought STX to its current level.
Stacks (STX) Price Analysis
Now trading at $0.87 (a 24hr change of +19.29%) at the time of writing.
The 23% pump last night, built-off the back of this double-bottom structure has painted a huge bullish pendant pattern on the chart – signalling this rally could keep pushing up.
Yet, with the RSI sitting overbought at 72 – there could be a 48 hour consolidation period before the next attempted push.
The MACD affirms this bullish outlook reading a supportive 0.0085.
On the short time frame (STF), Stack’s upside target is the key psychological level around $1 (representing a +13.97% move).
Regarding downside risk, a breakdown would likely see a return to the double-bottom structure at $0.60 (a -31.62% drop).
This gives us a STF Risk: Reward ratio of 0.44 – with an entry here characterised by more downside risk on the short term.
Could Stacks (STX) 10x to $10?
However, with such bullish technical structure suggesting the potential for a long rally – the long time frame (LTF) Risk: Reward structure is much more appealing.
A continuation of this breakout rally on the LTF could see a push up to previous heights around $3.20 (a +264.71% move).
Whereas on the LTF downside risk is minimal – with a return to a local bottom around $0.20 representing the worst case scenario (a drop of only -77.21%).
This produces a LTF Risk: Reward ratio of 3.2, suggesting that Stacks (STX) could well be an excellent long-term hold.
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