Stacks (STX) Layer-2 Bitcoin Network Kicks Off Nakamoto Upgrade to Boost Transaction Speeds

The upgrade will decouple the block production of Stack’s network from BTC. This will enhance block production and speed up confirmation times from minutes to just 5 seconds.

Bitcoin layer-2 network Stacks (STX) began its anticipated Nakamoto upgrade on Monday, aiming to enhance transaction speeds on the network.

The upgrade, named after Bitcoin’s pseudonymous creator, will reportedly decouple Stacks’ block production from BTC. This move is expected to optimize block production and reduce confirmation times on the Stacks network from minutes to 5 seconds.

Stacks, known for its focus on integrating BTC with smart contracts, aims to introduce greater utility of various decentralized finance (defi) functions using Bitcoin as its base layer. To this end, fostering adoption of a BTC-pegged token, dubbed sBTC, is a priority, as it would enable users to seamlessly bridge their BTC to the Stacks network.

However, an analyst anticipates lower highs for STX in the short term, despite the positive upgrade.

Related: Stacks price soars 820% in 80 days: What’s behind the surprise rally?

A technical perspective on STX’s price action reveals a phenomenal 820% filip from April 1, 2024, to June 24, 2024. However, the trend was swiftly reversed by a major sell-off from a high of $3.84 on April 1. Commencing a steep decline, the price entered a strict correction phase and followed a downward wedge for nearly 150 days.

This week, STX price encountered the upper border of the wedge but failed to penetrate it. The bearish momentum dragged STX below the 20-, 50-, and 200-day EMA bands, rendering a resurgence unlikely.

The relative strength index (RSI) at 50.05 edged above the median line after breaching the 14-SMA. The median line indicates that the price could deteriorate further on the break of the median line and might hit the lower border of the wedge if bearishness accelerates.

Similarly, the moving average convergence divergence (MACD) suggests that the bulls lost momentum as both lines are poised to form a bearish cross. If the bearish cross materializes, it would confirm that a longer bearish spell lies ahead.

Hence, the movement depends on the biases of investors and traders as per the price action. STX trades at $1.612 at press time, with an intraday dip of 0.17%. If the crypto experiences a bullish resurgence, the upper targets would be $2.0 and $2.50. However, if STX fails to sustain above the $1.50 level, it could plummet to the key support at $1.0 or even lower.

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