Stacks break and retest likely

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The Stacks (STX/USD) price exploded during the weekend as investors cheered the rapid growth of non-fungible tokens (NFTs) built on Bitcoin’s technology. The STX price rallied to a high of $2.6700, which was its highest level since April this year. This rally brought its total market capitalization to more than $2.6 billion, making it the 56th biggest cryptocurrency in the world.

Bitcoin NFTs gain traction

Stacks is a blockchain project built on the belief that Bitcoin can do better in the decentralised industry. Unlike Bitcoin, Stacks has smart contracts features that enable developers to build decentralized apps like those in DeFi and NFTs.

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Transactions in Stacks ecosystem are settled in Bitcoin, making them relatively attractive to enthusiasts. This is notable since most NFTs in existence today are built using Ethereum’s blockchain. Last week, Abraham Finley, a 12-year old, sold a collection of NFTs worth about $8,000 on Stacks. 

At the same time, the developers announced that Satoshibles were coming home and were leveraging Stacks to move from Ethereum to Bitcoin. Satoshibles are a collection of 5,000 algorithmically generated collectable NFTs. 

Still, Stacks has a big fight ahead to emerge as a leading player in the industry. For one, Ethereum is in a pole position in the industry. Most of all NFT projects in existence today have been built using Ethereum’s technology. At the same time, many upcoming projects like Polygon and Solana are gaining market share in the industry.

Meanwhile, the STX price faces the challenge about maintaining its bullish momentum as the Fear of Missing Out (FOMO) momentum fades. Historically, cryptocurrencies that have parabolic bullish moves tend to sell-off shortly afterwards. For example, the Shiba Inu price has crashed by more than 28% from its highest level last week.

STX price prediction

The STX price has jumped sharply in the past few weeks. The Stacks price has jumped more than 100% from its lowest level in October. As it rose, it moved above the key resistance level at $1.7831, which was the previous highest level. It was also the neckline of the inverted head and shoulders pattern. The price is also slightly above the 25-day and 50-day moving averages (MA). 

Therefore, a break and retest pattern is likely to happen, where the price moves back to the key support at $1.7830 and then resume the bullish trend.

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