Outlook for STX price after recent surge?
Stacks cryptocurrency price has increased and reached the upper side of the descending channel.
The reason for the coin’s increase is its close relationship with Bitcoin.
However, it is possible that this rebound is just a “dead cat bounce”.
Despite concerns about regulations in the US, Stacks price has made a strong comeback in the past two days. In the last 24 hours, STX has increased by more than 15% and has risen by over 22% from its lowest level on Tuesday.
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A possible reason for the rally
Stacks is a unique blockchain that allows developers to create applications for the Bitcoin ecosystem. According to its website, the network has over $901 million locked in its staking ecosystem, and it has distributed over 2000 BTCs to stakers in the past few months.
It is unclear why Stacks price has risen sharply in the past 24 hours. A likely reason is that this rally is in sync with that of other coins. Bitcoin has risen by over 3% in the past 24 hours, while other altcoins like Terra Classic and Pepe have jumped by double digits in the same period.
Another reason for the increase could be that Bitcoin’s ecosystem is growing, helped by Ordinals, the popular NFT platform. Data by TokenTerminal shows that Bitcoin fee revenue in the past 30 days came in at over $102.7 million, making it the second most profitable network in the industry. Additionally, CryptoSlam data shows that total Ordinals sales jumped to a record high in May, reaching over $195 million from the previous $33.2 million.
Although Stacks has no association with Ordinals, the platform’s success means that more developers could move to Stacks’ ecosystem soon. Furthermore, STX price has risen because Bitcoin seems safe in the ongoing war on exchanges like blockchain and Binance. The agency highlighted some tokens that it sees as securities, but Bitcoin was not one of them.
Stacks price prediction
Another reason for the increase in STX price is that this could be a dead cat bounce, which happens after an asset dips sharply. On the daily chart, we see that the coin retested the upper side of the descending channel shown in orange. Most importantly, Stacks’ 50-day and 100-day moving averages have made a bearish crossover.
Therefore, it is believed that the coin has more downside to go unless it moves above the two moving averages. If this happens, the next level to watch will be at $0.5200, which is the lower side of the channel.
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