- Stacks price jumped sharply after the Grayscale victory in the US.
- The ruling meant that Grayscale could move its trust into an ETF.
- Stacks has a close correlation with Bitcoin.
Stacks (STX) crypto price bounced back as investors cheered the latest setback by the Securities and Exchange Commission (SEC). The coin jumped to a high of $0.5561 on Wednesday morning, the highest point since August 15th. It has soared by more than 30% from its lowest point this month.
Another SEC setback
The SEC has taken a relatively vocal stance against cryptocurrencies in the past few years. For example, in June, the regulator sued Binance and Coinbase, two key companies in the crypto industry.
Recently, however, the regulator has faced more setbacks than wins in the judicial system. A few weeks ago, it lost a case in which it argued that Ripple’s XRP was a financial security. It has appealed that ruling.
The most recent setback came on Tuesday when a US court ruled that the SEC erred when it denied Grayscale Bitcoin Trust ability to convert GBTC into an ETF. Therefore, GBTC will become the biggest spot Bitcoin ETF with almost $20 billion in assets.
That ruling opens the door for other companies like Blackrock, Invesco, and WisdomTree to have their spot ETF. In fact, the SEC has until the end of this week to either delay, accept, or reject these applications.
Experts believe that the ETF decision could lead to more inflows in Bitcoin, which will lead to higher altcoin prices. I believe that the post ETF gains could be short-lived as the hype fades. As I wrote on Tuesday, investors have ways to invest in Bitcoin, including the BITO ETF.
Stacks price rose because of its association with Bitcoin. For starters, Stacks is a blockchain project that enables people to build dApps powered by Bitcoin. Developers can create dApps in industries like DeFi, NFTs, and the metaverse. Therefore, in most cases, Stacks does well when Bitcoin is rising.
Stacks price forecast
The 4H chart shows that the STX price is closely correlated with Bitcoin. Like BTC, it tumbled to a low of $0.4040 on August 17th and then moved sideways for more than a week. Stacks made a bullish breakout on Tuesday and flipped the crucial resistance at $0.50 (August 19 high) into a new support.
Stacks has moved above the Ichimoku cloud while the 25-period and 50-period moving averages have made a bullish crossover. Despite these gains, I suspect that the Stacks price will retreat as the momentum fades and as it forms a shooting star pattern. If this happens, the next level to watch will be at $0.50.
