Stacks price has seen a notable recovery this week, driven in part by the strong performance of Bitcoin and other altcoins.
The STX token has risen for four consecutive days, moving to $1.6774, which is about 32% above its lowest point this month. This rebound brought its market cap to over $2.4 billion.
Stacks, a layer-2 network for the Bitcoin network, has bounced back due to the ongoing Bitcoin rebound. Bitcoin has risen from last week’s low of $53,700 to over $58,000.
Bitcoin’s rebound triggered gains for the altcoin market, with Aave, Uniswap, Lido DAO, and Jasmy rising by double digits.
Stacks has also recovered as the volume of assets in its Decentralized Finance (DeFi) ecosystem has increased. The network has over 53 million STX in TVL, up from last month’s low of 44.6 million STX.
In dollar terms, the TVL jumped from June’s low of $60.2 million to $80 million. Most dApp networks in Stacks, like StackingDAO, Zest, Alex, and Bitflow, saw their TVL increase by over 15% in the past 7 days.
Additionally, the recently launched Grayscale Stacks Trust (STX) saw its assets rise to over $2.1 million, a sign of growing demand.
However, the recovery faces three main risks. First, the rebound could be a "dead cat bounce," where an asset in a downtrend stages a brief recovery.
Second, the STX token formed a death cross on June 24th. A death cross occurs when the 200-day and 50-day Exponential Moving Averages (EMA) cross, often leading to more downside.
Finally, analysts caution that Bitcoin faces substantial hurdles that could affect its price. Bitcoin miner capitulation continues, and Germany and Mt. Gox wallets have started flooding coins into the market.
Anthony Pompliano, a well-known crypto investor, warned that these releases and lower volume could impact Bitcoin’s price. Ki Young Ju noted that Bitcoin could hover between $47,000 and $48,000 for a while.
These factors could hurt Stack’s prices because of the close correlation that exists between Bitcoin and other altcoins.
