Stacks (STX) Price Attempts Breakout Ahead of Upcoming Nakamoto Fork

Key Takeaways

• The Stacks (STX) Nakamoto Hard Fork will go live on Oct 9.
• The STX price failed to break out from the $1.95 resistance.
• Will STX reclaim this area ahead of the Nakamoto Hard Fork?

The Stacks (STX) price has increased since Aug. 5, culminating with a 95% increase and a high of $2.07 on Sept. 26.

However, the price failed to sustain momentum and promptly fell below the $1.95 area.

With positive Stacks news that could catalyze a price increase, let’s analyze the price action and see if STX can regain its momentum and break out.

Nakamoto Hard Fork

The much-anticipated Nakamoto hard fork for Stacks will finally go live on Oct. 9. The hard fork will occur on Bitcoin block 840,360, greatly increasing transaction throughput.

Additionally, it will shift the Stacks block production to a fixed cadence . Besides creating faster block times, this will ensure that Bitcoin miners do not have an advantage when mining STX.

However, the biggest upgrade is that Stacks will now have 100% Bitcoin finality. This means that once a transaction is confirmed it cannot be altered, greatly enhancing Stack’s security.

The final primary testnet went live on Sept. 30.

There was also positive news about Stacks in October. According to Messari’s report, Stacks is considered the leader in Bitcoin’s Layer-2 ecosystem , and the release of Nakamoto alongside sBTC in Q4 will give even more access to BTC liquidity.

STX Price Attempts Breakout

The daily chart shows that STX has increased since its low of $1.05 on Aug. 5. During this time, the price has made several higher lows, creating an ascending support trend line.

On Sept. 26, the STX price exceeded the $1.95 horizontal resistance area. However, it failed to sustain the increase and fell below it. Then, it created a lower high (black icon) on Oct. 4.

Nevertheless, STX still trades above the ascending support trend line. Combined with the $1.95 area, it creates an ascending triangle, considered a bullish pattern.

However, technical indicators provide an undetermined trend. The Relative Strength Index (RSI) risks breaking below 50, and the MACD has made a bearish cross despite being in positive territory. As a result, the daily time frame gives an inconclusive STX price prediction

STX Breakdown Instead?

While the daily time frame gives an inconclusive reading, the six-hour one is bearish. There are two main reasons for this.

Firstly, the bounce that has been ongoing since Aug. 5 is contained inside an ascending parallel channel. This often means that the price action is corrective. Moreover, the Sept. 27 high (black circle) failed to reach the channel’s resistance trend line.

Secondly, the movement is an A-B-C corrective structure, in which waves A and C have a 1:1 ratio.

Because of these readings, a breakdown from the channel is the most likely scenario. If this happens, the STX price can drop to the 0.618 Fibonacci retracement support level of $1.45.

More Downside Ahead

Even though the upcoming Nakamoto Hard Fork is an important positive development, the STX price action suggests that a breakdown is ahead. If Stacks closes below the support trend line of its channel, a decline to $1.45 will be on the cards.

Read More: Stacks Price Prediction for 2024: STX Price Analysis