Stacks (STX) Token Flips Key Support, Nakamoto Upgrade in the Spotlight

Stacks (STX) token was trading at $1.80 on Monday, Aug. 26, up by 68% from its lowest level in August.

Bitcoin layer-2 network Stacks (STX) is set to begin rolling out the Nakamoto upgrade, the most significant event in the platform’s history.

Stacks (STX) token price today is $1.80, Wednesday, Aug. 26, up 68% from its lowest level in August.

Stacks (STX) token price analysis for Aug. 26, 2024. Source: Tradingview

The token will be in focus this week as developers begin rolling out the Nakamoto upgrade, the most significant event in the platform’s history.

According to a recent X post by the developers, this upgrade is expected to be a game-changer for the network. It will reduce the average transaction time from 10 minutes to just seconds, enabling new use cases such as minting liquid stacking tokens, depositing them into Decentralized Finance (DeFi) applications, and borrowing against liquidity.

In conclusion, the Nakamoto upgrade will facilitate the:

Interaction with DeFi apps in seconds

Implementation of DeFi strategies, which require fast blocks

Onboarding builders looking to build high-throughput use cases on Bitcoin

The Nakamoto upgrade will also pave the way for the upcoming sBTC, an asset pegged 1:1 to Bitcoin (BTC). This will simplify the use of Bitcoin in DeFi, non-fungible tokens (NFTs), and gaming, differentiating it from wrapped Bitcoin (wBTC), which is entrusted to a single custodian. Unlike wBTC, sBTC will be decentralized, offering features like censorship resistance, cost efficiency, and high security.

Once the upgrade process is complete, developers expect it to attract more creators in sectors like gaming and NFTs.

Stacks, the largest layer-2 network for Bitcoin, has attracted tens of developers in sectors like wallets, NFTs, and SocialFi. Its DeFi ecosystem has also accumulated over $100 million in assets, with StackingDAO, ALEX, Zest, and Bitflow being the biggest decentralized applications (dApps) in the ecosystem.

Layer-2 networks have grown substantially in the past few years. Arbitrum (ARB) has become the biggest player in the industry while networks like Base, Optimism, and Blast are seeing strong momentum.

Stacks flips key support

STX/USD daily price chart on a crypto exchange. Source: SimpleTradingTools

Stacks (STX) has rebounded from this month’s low of $1.0638 to $1.80, flipping the upper side of the descending channel into a new support level and moving above the 50-day moving average (blue line).

Now, the token is trading at a 61.8% Fibonacci retracement point following this rebound from the support at $1.0638.

With this bullish momentum, the token may continue rising as bulls target the 50% retracement point at $2.11, which is 20% higher than the Aug. 26 level.