The Stacks price was trading at $2.54 as of 1:00 am ET, down 3% over the last 24 hours.
STX has increased by 460% since October and has been up 85% over the last 30 days, according to data from CoinMarketCap.
STX trading volume has also increased by 2,600% over the last three months to $437.6 million on Feb. 22.
The impressive performance displayed by Stacks has left many wondering what is driving the uptrend.
STX is the native token of the Bitcoin layer 2 scaling solution Stacks, which is aimed at supporting the core DeFi) features similar to those found within other layer 1 ecosystems such as Ethereum and Solana.
Recently, there has been a growing interest in Bitcoin layer-2 projects because of 1) spot Bitcoin ETFs, which now have more than $10 billion in assets under management (AuM) and 2) their focus on Bitcoin ordinals, which already have a $2.5 billion market cap.
Historically, movements in the price of the base layer token have always been mirrored by those of the layer 2 tokens built atop them. As such, Bitcoin's price performance always influences the direction of the other tokens within the ecosystem will take.
As such, the excitement surrounding spot Bitcoin ETFs at the end of 2023 and their market debut on Jan. 11 after approval by the U.S. Securities and Exchange Commission saw BTC price rally to a 24-month high of $49,000. In the same way, STX climbed to hit $2.06, the best price in nearly two years.
More recently, the hype around the upcoming Bitcoin halving, coupled with increasing inflows into the spot ETFs, pushed the BTC price above $53,000 on Feb. 20. STX, again, followed BTC's path to a new high at $2.90.
The chart below shows how STX's price has always followed Bitcoin's trend since Stacks launch in 2021.
STX/USD vs. BTC/USD daily chart. Source: TradingView
However, data from Messari shows that STX's 600% performance over the 12 months has surpassed the 110% displayed by Bitcoin over the same period.
Data from DeFi aggregator platform DefiLlama shows that Stacks' TVL has increased by 830% from $12.35 million on Oct. 15, 2023, to $114.87 million on Feb. 22.
The surge in TVL indicates a significant capital infusion into the Stacks DeFi ecosystem, underscoring investor confidence and active participation in DApps.
Total value locked on Stacks. Source: DefiLlama
As interest in Bitcoin layer 2 continues and the halving event draws near, STX is expected to ride along to new levels.
In the short term, the bulls will try to push the price back above the immediate resistance at $2.70 and later to the two-year high at $2.90.
Above that, STX could rise to confront resistance from the psychological level at $3.0 before making a run toward all-time highs above $3.60.
STX/USD daily chart. Source: TradingView
On the downside, the relative strength index (RSI) shows that the Stacks price is massively overbought. As such, the correction may continue as sellers book profits at higher levels.
The $2.49 support level and the psychological level at $2.0 are key to watch on the downside.
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