I’m not the best analyst, but I try to be logical. Please hear me out.😆
STX is down nearly 70% against BTC, currently sitting around 750 sats after peaking at 2,600 sats in December.
The easy take is that STX is losing, but the way I see it, there are only two explanations for this drop:
- STX is losing relevance, BTC DeFi won’t take off, and Stacks has no future.
- BTC dominance is temporarily strong, but once liquidity rotates, STX will be one of the first beneficiaries, and these are prime accumulation zones.
If the first explanation is true, that means Bitcoin’s base layer is enough. No need for faster finality, no need for programmability, and no need for BTC DeFi. That doesn’t make sense. Bitcoin L2s are inevitable. The market just hasn’t priced them in yet.
Bitcoin is leading the market right now, but if history repeats, BTC adjacent assets will benefit next.
- 2017: BTC dominance peaked → ETH exploded as DeFi took off.
- 2021: BTC ran first → Solana and alt L1s absorbed liquidity.
- 2024/25: BTC is running → Bitcoin L2s are next in line.
The Market is Fighting Fundamentals (And That’s a Setup for a Reversal)
Derivatives data is showing a clear imbalance:
- Open Interest (OI) is up 7.71% ($31.55M), even as volume is down (-34.61%). This means traders are building positions ahead of a major move.
- STX Long/Short Ratio (Binance: 1.41, OKX: 1.68). More traders are long than short, but not at extreme levels, meaning there’s still room for more long positioning before a squeeze risk.
- Funding rates have also been negative at times, meaning shorts are paying longs. Shorts are also being liquidated more than longs. In the last 24 hours, $30.2K in shorts got wiped out, compared to $9.81K in longs. If this keeps happening, we could see a short squeeze. The market isn’t reflecting the fundamental setup, and when that happens, the realignment can be violent.
Stacks captures network effects
Ethereum (not the best example) succeeded not just because of smart contracts but because every new app using ETH strengthened ETH itself. Stacks benefits from the same cycle:
More BTC in DeFi → More transactions → More fees
More fees → Higher demand for STX
Higher demand → Stronger security → More builders and apps
Liquidity is already here; infrastructure is being built.
- @ALEXLabBTC & @VelarBTC: Fully operational DEX
@Bitflow_Finance: BTC liquidity aggregation.
@HermeticaFi: BTC-backed and yield-bearing stablecoin
@ZestProtocol: Bitcoin lending markets.
Bitcoin is getting institutional adoption right now. ETFs are here, companies are adding BTC to their balance sheets, and sovereign funds are buying. The next step is BTC-native yield, but institutions won’t take legal risks. Stacks is the only BTC L2 with regulatory clarity. When institutions start looking for a legal way to deploy BTC, Stacks will be at the top of the list.
Memes and Community Matter More Than People Think
Crypto isn’t just about tech. It’s about attention, narratives, and culture. Stacks has one of the strongest BTC-aligned communities. If you think that doesn’t matter, look at Solana.
Memes brought users → Users brought liquidity → Liquidity-funded development. Now Solana has one of the strongest alt L1 economies. That same process is happening on Stacks right now. Bitcoiners are watching. Meme communities are growing.
Right now, STX looks weak. That’s exactly why I think it’s early. STX/BTC is at multi-month lows, but BTC L2 adoption hasn’t even started. Shorts are overextended, funding rates have been negative, and a short squeeze could send STX violently upward.
People assume this transition will be slow. I think they’re wrong.
Refrence - x @_nottim
