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Stacks [$STX] is among the biggest altcoin gainers, thanks to its correlation with Bitcoin [$BTC] as its Layer 2 (L2) solution. $STX is up by more than 18% in the past 24 hours, as its token trading volume increased by 145%.
Meanwhile, Bitcoin is trading at $77,000, four days after it established a bottom just above the $62,670 zone. As such, this strength has been spilled over to the whole $BTC ecosystem.
Technical indicators show that the market structure of Stacks is shifting, though it remains below a very KEY zone at $0.26. Can bulls push $STX back above the premium zone?
$STX crypto price prediction in the short term
The 4-hour chart shows the altcoin has broken from contraction, as indicated by the overlaid Bollinger Bands (BBs). This BB contraction, which often hints at accumulation, lasted between late July and the 19th of August.
With the BBs expanding, $STX prices traded above the upper band, which indicated massive volatility.
Apart from the breakout, Open Interest (OI) was rising. From a daily perspective, the metric surged by double-digits across multiple exchanges like Binance, OKX, Bybit, and KuCoin, as per CoinGlass.
From the data, traders could anticipate a further uptrend provided Bitcoin remains strong. This is because $STX’s correlation coefficient with $BTC is 0.97, indicating that $STX’s movement is in sync with $BTC.
From a short-term perspective, $STX needs to flip the $0.16-$0.17 zone into support. This outcome would suggest the current market structure remains intact. Failure at this supply zone could revert it back to at least $0.14, which is the top of the BB contraction.
A look at the bigger picture!
But for a true market structure shift, $STX’s price needs to trade inside the premium zone above $0.26. The daily chart shows the altcoin is still in the discount area when taking into account this year’s price action.
If $STX can reclaim $0.26 as support, then the odds of trading toward this year’s peak of $0.40 increase. Otherwise, this pump may be just a retracement of the broader bearish market structure.
What’s behind $STX’s price rebound?
That said, it is worth expounding on what drove this market resurgence even though it was similar throughout crypto. Stacks was primarily driven by its $BTC correlation.
To be specific, the speculative trading came from the BTCFi narrative. Stacks, as a $BTC L2, was enabling Bitcoin staking for institutions
Final Summary
- Stacks rallied over 18% in 24 hours, thanks to its correlation with Bitcoin, as the BTCFi narrative provided fuel to $STX’s rally.
- $STX crypto price prediction indicates that the altcoin needs to flip $0.17 into support in the short term and $0.26 in the midterm.
coinedition.com