Over the past several months, Stacks [STX], Bitcoin’s [BTC] layer 2 protocol, has been gearing up for a significant upgrade known as the Nakamoto upgrade. With only a week left until the scheduled rollout, the anticipation is building. However, as the upgrade approaches, STX has experienced a bearish trend in its price performance. The question remains: will the Nakamoto upgrade be the catalyst that propels STX to $2?
The Essence of the Stacks Upgrade
Named in honor of Satoshi Nakamoto, the mysterious figure behind Bitcoin’s inception, the Nakamoto upgrade is set to decouple Stacks’ block production schedule from that of Bitcoin. This crucial upgrade is slated to go live on the 29th of October.
According to the official documentation, “The Nakamoto Release is an upcoming hard fork on the Stacks network aimed at delivering several advantages, notably enhanced transaction throughput and 100% Bitcoin finality.”
Under Nakamoto, the production of Stacks blocks will no longer rely on miner elections. Instead, blocks will be generated at a fixed rate, and the PoX Stackers will determine when to switch between miners based on elections.
Can STX Surpass the $2 Mark?
Despite the impending significant upgrade, STX’s native token has not experienced a positive price trajectory. Recent data from CoinMarketCap highlights a more than 5% drop in STX’s price over the last 24 hours. Currently, Stacks is trading at $1.84, boasting a market capitalization exceeding $2.75 billion. The surge in trading volume coupled with the price decline has validated the downward movement.
In light of these developments, an in-depth examination of STX’s current status was conducted to evaluate the feasibility of reaching the $2 threshold in the near future. Analyzing Santiment’s data revealed a noticeable decrease in STX’s weighted sentiment in the previous week, signaling an emerging bearish sentiment and a lack of investor confidence in a price surge.
Further scrutiny of Coinglass’ data unveiled a dip in STX’s long/short ratio, indicating a market favoring short positions over long ones, a bearish indicator in essence.
Nevertheless, a decline in Stacks’ open interest suggests a potential reversal in the prevailing bearish trend in the foreseeable future. A detailed review of STX’s daily chart was conducted to offer insights into the future trajectory.
The analysis indicates that STX’s price is consolidating within a rising triangle pattern. The recent price dip could be attributed to this consolidation phase within the pattern. A breakout above the rising triangle pattern could propel the token beyond $2 in the imminent days.