Stacks price is recovering; gains could be short-lived

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As an experienced analyst, I’m closely monitoring the recent price recovery of Stacks (STX). The token has seen a notable surge in value over the past few days, with its market cap now surpassing $2.4 billion. This rebound can be attributed to the ongoing Bitcoin rally and the increasing volume of assets in Stacks’ Decentralized Finance (DeFi) ecosystem.

The cost of Stackhas experienced a significant rebound in the past week, fueled in part by the robust advancement of Bitcoin and various other cryptocurrencies.

Over the past four days, the price of STX token has surged, reaching a new high of $1.6774 – a significant jump of approximately 32% from its monthly low. Consequently, the token’s market capitalization now exceeds $2.4 billion.

Stacks price is recovering; gains could be short-lived

Stacks price chart

Stacks recovery continues

The Bitcoin sidechain, referred to as Stacks, has recovered following Bitcoin’s recent price surge. Bitcoin’s value has rebounded from its previous low of $53,700 to over $58,000, defying the transfer of coins from German and Mt. Gox wallets to exchanges.

The recovery of Bitcoin has led to significant growth in the prices of various alternative coins. Coins such as Aave, Uniswap, Lido DAO, and Jasmy have experienced double-digit percentage increases.

The Decentralized Finance (DeFi) ecosystem on Stacks has bounced back as the value of assets within it has grown significantly. Currently, there is over 53 million STX in Total Value Locked (TVL), which is a noticeable improvement from the previous month’s low of 44.6 million STX. In monetary terms, this represents a substantial leap from June’s low TVL of $60.2 million to its current value of $80 million.

In the previous week, the total value locked in decentralized applications (dApps) such as StackingDAO, Zest, Alex, and Bitflow within the Stacks network has grown by more than 15%.

As a crypto investor, I’ve noticed an intriguing development with the newly introduced Grayscale Stacks Trust (STX). The trust’s assets have rapidly grown to surpass $2.1 million within a short timeframe. This noteworthy increase signifies strong investor interest in STX.

Stacks price recovery could be brief

One potential danger in the healing process of stack recoveries is the possibility that the uptick might only be a “dead cat bounce.” In other words, when an asset experiencing a significant downtrend suddenly recovers, this could merely be a short-lived rebound before the price plummets once again.

As a crypto investor, I keep a close eye on technical indicators to help guide my investment decisions. One such indicator that recently caught my attention is the death cross formation with STX token. This occurs when the 200-day and 50-day Exponential Moving Averages (EMAs) intersect, signaling a potential trend reversal. Historically, this pattern has often preceded further price declines.

As a researcher, I would caution that Bitcoin’s price may be influenced by several challenges. Miners are continuing to capitulate, meaning they are selling their bitcoins at a loss. Additionally, large wallets from Germany and Mt.Gox have recently dumped coins into the market.

As an analyst, I’ve observed some noteworthy developments in the crypto market recently. On Wednesday, Anthony Pompliano, a prominent crypto investor, voiced his concern that the latest releases and decreased trading volumes could potentially influence Bitcoin’s price. In a similar vein, Ki Young Ju shared his perspective through a tweet post, suggesting that Bitcoin might remain around the $47,000 to $48,000 range for an extended period.

From a broad perspective, your analysis is insightful. The Bitcoin market has the capacity to handle potential sell-offs from the German government and Mt. Gox creditors, estimated to result in a decrease of approximately 10.5%. This would bring the price range around $47-48K. However, these events will not be the catalyst for ending this market cycle.

— Ki Young Ju (@ki_young_ju) July 8, 2024

The relationship between Bitcoin’s price and that of other cryptocurrencies, known as altcoins, being quite strong, may negatively impact stack prices due to this correlation.

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2024-07-11 15:54