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Stacks (STX) managed to keep up with the bears, as indicated by its struggle to match the bullishness returning to the crypto market. The recently released Consumer Price Index data, which showcased an improving macroeconomic situation, instilled confidence in investors.
Even though the decrease in the index was marginal, dropping from 5% in March to 4.9% in April, it still had a positive impact on the broader financial market. The Dow Jones and NASDAQ began the day with gains, reflecting the optimistic sentiment.
Similarly, the overall cryptocurrency market experienced a rise, with CoinGecko data indicating a 1.4% increase in the total market cap since yesterday. However, Stacks (STX) faced challenges in keeping pace with this positive trend.
Source: Coingecko
The latest market data shows that STX is currently priced at $0.622, down 14% in the weekly timeframe, and continuing the broader market downturn which brought pain to investors.
Layer 2 Solutions On The Bitcoin Blockchain
Bitcoin, established in 2009 shortly after the 2008 financial crisis, stands as one of the most enduring cryptocurrencies in the market. Despite its longevity, Bitcoin’s underlying blockchain has remained largely unchanged since its inception, preserving its original functionalities. Enter Stacks, a significant player in Bitcoin’s narrative, as it pioneers the introduction of Layer 2 solutions onto the Bitcoin blockchain.
With network congestion becoming an apparent problem as blockchain adoption increases, L2s on the Bitcoin blockchain will be the obvious solution. It’ll also bring smart contracts to Bitcoin, increasing its viability in the long run.
With the creation of Bitcoin NFTs that were once unheard of on-chain, Stacks can leverage the hype surrounding these developments to further launch itself as the novel L2 chain for Bitcoin.
At $0.62, Can Stacks Recover From The Bearish Pressure?
Although the market itself has been trying to recover from the general decline this week, STX itself struggled to maintain a strong position.
At the time of writing, its current momentum places STX below the $0.7 resistance level. If the bulls manage to flip this level to support, investors and traders will be able to target $0.8 in the short to medium term.
STX market cap nearing the $1 billion market cap. Chart: TradingView.com
STX also has a strong correlation with Bitcoin. Thus, monitoring the movement of Bitcoin will be beneficial for STX bulls. Keeping tabs of the macro situation will also bring gains to investors. This week, the CPI data was released showing the markets in an improving situation.
Although only a marginal improvement, it led the financial market to switch from bearish to bullish within the span of a day. If the situation macro-wise continues to improve, this bullishness will spill to the crypto markets leading to gains for investors on STX.
-Featured image from Fantastic Handyman
