Portal Ventures, a cryptocurrency venture capital firm, has reaffirmed its support for Stacks (STX), a Bitcoin (BTC) Layer 2 scaling solution, citing robust fundamentals and limited selling pressure from token unlocks.
Partner Catrina Wang emphasized STX’s advantage as the first mover in BTC Layer 2 scaling, boasting over a decade of experience in the field.
Factors Driving Stacks Growth
Given the current resurgence of Bitcoin and the expanding DeFi environment, Wang believes that Stacks protocol has significant potential for growth.
Notably, Stacks is the sole protocol that offers institutional investors a native Bitcoin staking yield without the need for a third party, thus reducing counterparty risks. As mentioned in the report,
“One of the key factors driving institutional adoption is the use of STX as the default BTC staking platform. STX was the first token issuance compliant with the SEC in 2021.”
Furthermore, with 100% of STX’s supply now unlocked, there is no longer any sell pressure from early investors, setting it apart from other venture-capital-funded tokens.
Reduction in Whales’ Holdings
STX entered December with a bullish sentiment, marked by an increase in whale positions, particularly in the Futures market. However, these large holders have since decreased their long positions, as evidenced by the decline in the Whale vs. Retail delta.
Despite this, the uptrend remains robust, indicated by the Average Directional Index (ADX) remaining above 20. If the momentum sustains, STX might be aiming for its previous high of $3.8 by 2024.
Technically, the $3.2 level appears to be the immediate obstacle for the uptrend to continue. Strong capital inflows and buying pressure, as indicated by the altcoin’s technical indicators, suggest that STX could experience further upward movement.
It is worth mentioning that the protocol is potentially launching its sBTC mainnet on December 16 to enhance its native BTC staking. This upgrade would enable programmable BTC to transition to the Stacks blockchain, enhancing DeFi functionalities on the Bitcoin network.
In conclusion, STX’s promising fundamentals have translated into its recent price performance. While the forthcoming update could serve as a positive trigger, the short-term price behavior of STX remains uncertain.