Stacks new upgrade: Is Bitcoin the potential game-changer
Stacks STX is a blockchain project that allows its developers to build smart contracts and dApps on top of the Bitcoin BTC Blockchain. They recently announced their new upgrade of 2.1. The question arises is Bitcoin the potential game-changer for STX?
The announcement of the upgrade was made on 19 March 2023. Before that Stacks had upgraded to version 2.05 in December 2022. The aim of the upgrade was to shorten the time it takes for the Stacks network to build a block. Ultimately this will attract more users to the network.
Enhanced clarity with the new upgrade
Stacks supports smart contracts and decentralized apps built on top of the Bitcoin network. Proof of Transfer (PoX) consensus is responsible for carrying out this process, with Bitcoin hash power to secure stacks transactions.
Moreover, With the recent Stacks Improvement Proposal SIP upgrade 2.1 the bridge between Stacks and Bitcoin will improve and strengthen. Also to improve the decentralized mining process.
The key benefit of the upgrade is that it will reduce the Bitcoin transaction fees by 25%. This is possible through the implementation of a new mining algorithm that will ultimately reduce transaction costs.
In addition to reducing fees, it will also decrease the barrier to entry for decentralized mining pools.
Even though Bitcoin is closely linked to Stacks with smart contracts or mining interaction. The price performance of Bitcoin also has an impact on STX.
The recent performance of STX has been pretty impressive as it witnessed a 270% cumulative increase over the last 30 days. While there could be various reasons that led to this but it seems like the Bitcoin price movements have been a major contributor to this.
Three weeks ago there was a price surge of around 165% of STX which must have been partially driven by Bitcoin’s price during that time. Some other involved factors could be an increase in demand for STX or positive news about the project.
Though it is difficult to say if Bitcoin can still influence an upside for STX. As the price movements of Bitcoin are unpredictable, it is hard to monitor whether it might impact the price of other cryptocurrencies in the future. But since Bitcoin is related to STX it might still have an impact on its price.
The upside of STX will only remain if certain conditions are met
According to technical analysis, since march 17 STX has been leaning on an upward trendline of support. Resistance still pushed down the price in many instances but it recovered from that drop eventually.
The Bollinger Bands BB indicates that STX has now entered extreme volatility, which is certainly beyond its contracting area. Though the recent data may suggest that the STX may be overbought.
A Directional Movement Index DMI helps traders indicate which market is trending or not. The recent DMI date of STX proved that the buyers of STX have taken over the sellers. The -DMI slid below the +DMI, indicating that selling pressure is weaker.
However, the 19.78 value of the Average Directional Index suggests that the trend may not be that strong. This means even if the buyers are in control of the market the sellers might still have some resistance. But if the value reaches 25 or higher that will indicate a stronger trend which the traders must keep an eye out for.