Bitcoin News Today: Stacks Token Drops 7.04% Despite Bullish Pattern

Stacks (STX) is currently exhibiting signs of a potential trend reversal, as indicated by a double bottom pattern visible on its price charts. This pattern suggests that the token may be poised for a significant price breakout, with analysts projecting a target of $2.80. The double bottom formation is anchored by a strong support level at $0.64, with resistance positioned at the $0.95 neckline. A breakout above this neckline could confirm the pattern and drive the price towards the $2.80 target, according to analyst Ali Martinez. However, Martinez also noted the possibility of a short retracement before the continuation, as price action may retest the neckline after breaking it.

Despite the bullish setup, STX has since declined, trading at $0.8394 at press time, reflecting a 7.04% loss in the past 24 hours. The token has steadily dropped from its earlier high of $0.9021. Technical analysts maintain that the pattern remains valid if support holds and momentum returns near resistance levels. The double bottom pattern is a bullish reversal pattern that typically forms after a downtrend, indicating that the asset may be ready to reverse its course and move higher.

In addition to the technical indicators, broader network upgrades continue to drive interest in Stacks’ Layer 2 vision for Bitcoin. The network is focused on expanding Bitcoin’s use case through its modular Layer 2 solution, which enables smart contracts and decentralized finance (DeFi) applications directly on Bitcoin. The upcoming upgrade, SIP-031, is set to improve interoperability and unlock new utilities for Bitcoin-based assets. This enhancement will strengthen the foundation for DeFi tools and cross-chain communication, leveraging Bitcoin’s inherent security to deliver faster, scalable applications with broader reach.

Unlike other Layer 2 solutions that are still in development, Stacks has already implemented functional improvements. The SIP model allows continuous evolution, positioning the ecosystem as a hub for building at Bitcoin’s scale. Developers are closely monitoring STX’s price action in tandem with these network advancements, as the token’s performance is closely tied to the success of the Stacks network. The network’s focus on expanding Bitcoin’s utility and enhancing its capabilities for DeFi and cross-chain communication is expected to drive long-term growth and adoption.