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In contrast to the majority of cryptocurrencies, which began the week on a downward trajectory, Stacks (STX) deviated from the prevailing trend and registered gains.
Stacks Network’s native token, STX, had a strong 600% increase in 2023. Stacks is a noteworthy 2019 SEC-qualified token that functions as a layer-2 Bitcoin protocol for smart contracts.
Stacks Surges: Social Buzz And Growth
Stacks has been the talk of the cryptocurrency community lately, receiving a lot of attention on social media. The altcoin’s market value has experienced a notable upswing, having reached a new eight-month high, concomitant with this rise in social volume.
STX’s price has increased by more than 30% in the last week, which has been an impressive rise. This increase in social media mentions and the price gain that followed highlight the rising attention and involvement that Stacks is getting, pointing to increased excitement and hope among investors and the cryptocurrency community as a whole.
Furthermore, in the last few hours, the Bitcoin scaling solution minted its first STX-20. The inscription caused a spike in network activity that led to a sharp rise in transactions and brief network congestion.
STXUSD currently trading at $1.3283 territory. Chart: TradingView.com
The upsurge coincided with the excitement surrounding Bitcoin Ordinals and BRC-20. The average transaction amount experienced a record increase earlier this month, rising from $5 to $7.
Because more users were etching non-financial data onto the Bitcoin blockchain, there was an increase in demand for block space, which contributed to the growing transaction costs.
The token’s price has been steadily rising for the past month, which has encouraged more social contact among members of the cryptocurrency community.
Meanwhile, on-chain data provider Santiment cautioned in a recent post on X (formerly Twitter) that excessive social media activity frequently leads to “fear of missing out” (FOMO) buying.
🗣️ #Solana (+13%), #Stacks (+23%), and #NEARprotocol (+17%) are the top trending assets, according to rising social volumes. In each case, when there is mainstream talk at this level, #FOMO will create price tops. If holding any, take a cautious approach. https://t.co/bb3O2lFJd1 pic.twitter.com/oMnVvAI0ea
— Santiment (@santimentfeed) December 21, 2023
STX Price Surge Raises Red Flags
The emergence of local price peaks is usually the result of this trend, and as the initial euphoria wears off, prices frequently correct quickly. Following a spike in enthusiasm and speculative interest that drives price increases, there follows a correction phase in the market.
The Bollinger Bands (BB) indicator for STX shows a growing gap between its upper and lower bands, indicating more volatility following the recent price ascent. Since December 3rd, the Average True Range (ATR) has increased by 140% to reach 0.12, suggesting that there may be notable price swings.
Due to the spike in demand, STX’s major momentum indicators—the Money Flow Index (MFI) at 80.22 and the Relative Strength Index (RSI) at 71.56—have reached overbought levels, indicating a potential for a short-term price decrease and the probability of buyer exhaustion.
Despite an endorsement from billionaire investor Tim Draper, it seems that STX couldn’t leverage this significant support to its fullest potential.
In a recent interview with Coin Bureau, Draper designated Stacks as the foremost “showstopper” among crypto projects, highlighting it as the most impactful project he discovered this year.
As STX captures attention and climbs to new heights, the unfolding twists in its journey continue to captivate the cryptocurrency space, leaving enthusiasts eager to see what the next chapters hold for this compelling digital asset.
Featured image from Shutterstock
