Portal Ventures, a Crypto VC firm, has increased its support for Stacks (STX), a Bitcoin L2 scaling solution, due to solid fundamentals and minimal selling pressure from token unlocks.
One of the firm’s Partners, Catrina Wang, emphasized STX’s advantage as the first BTC L2 solution with a decade of experience.
Factors Driving Stacks Forward
Given the current resurgence of Bitcoin and the expanding DeFi ecosystem, Wang believes that the Stacks protocol has significant growth potential.
Furthermore, STX stands out as the sole protocol providing institutional investors with a native Bitcoin staking yield without intermediary risks. As Wang’s report suggests,
“Institutional adoption is being propelled by the use of STX as the preferred BTC staking platform, given its SEC compliance and pioneering status in 2021.”
In addition, all STX tokens have been released, eliminating sell pressure from early investors commonly seen with other venture-backed projects.
Reduced Exposure Among Major Investors
STX entered December with a bullish sentiment, witnessing increased interest from large investors, particularly in the Futures market. However, these investors have since reduced their long positions, indicating a decline in Whale vs. Retail activity.
Despite this adjustment, the overall uptrend remains robust, with the Average Directional Index (ADX) surpassing 20. If the momentum persists, STX could target its previous high of $3.8 from 2024.
Technical analysis points to $3.2 acting as a short-term resistance level that needs to be surpassed for the bullish trend to continue. Strong capital inflows and buying pressure, as indicated by the altcoin’s indicators, suggest that STX may experience further price appreciation.
Moreover, there are indications that the protocol is preparing to launch its sBTC mainnet on December 16, enhancing its native BTC staking capabilities. This upgrade would enable programmable BTC to migrate to the Stacks network, expanding DeFi functionalities on the Bitcoin blockchain.
In summary, STX’s robust fundamentals have been reflected in its recent price performance. While the upcoming mainnet launch could serve as a positive catalyst, the short-term price action of STX remains uncertain.