Hello Traders!

Bitcoin continues to consolidate as it closes the month of March within an ascending triangle pattern. The cryptocurrency fell into support at the lower boundary of the triangle on the following chart this week, which allowed it to rebound higher and climb back above $6,000.

The break of this triangle will be important to dictate which direction Bitcoin will be headed toward in April 2020. The upper boundary of the pattern is at $6,800 and if Bitcoin can break and close above here then we might see some positive price action in the following months. 

However, if Bitcoin breaks beneath this triangle it will likely head much lower and possibly even break the support at $4,800. We are approaching the apex and should know the outcome of this triangle within the first week of April 2020 so stay tuned!

Today, I would like to talk about a very interesting and exciting new decentralized new internet platform that is called Blockstacks.

Firstly, let us take a look at the performance of Blockstack (STX) below from November 2019 until today;

Looking at the chart above we can see that STX is very young in its trading career. It has reached a high of around $0.24 but has since dropped lower during the March market collapse to reach the $0.05 lower. Currently, as of late March 2020, it is trading at a price of $0.086 after rebounding from $0.08.

Blockstacks is a very new project in the cryptocurrency community. However, the team has been working pretty hard for a long time. In fact, the project was actually founded in 2013 and underwent 4 years of research and development before we had even heard about it! Over that time, the team has grown substantially;

The team intends to build a decentralized internet platform to allow users to retain control and ownership of their own data and identity. The platform works in a way in which all dApps on the network are run on the client-side machine and are not connected to any 3rd party servers. Moreover, the personal user data on these apps are stored on storage solutions of the user’s choice but the data is fully encrypted so the storage provider will only get to see a big mess of encryption if they try to look inside.  

This project was actually the first accredited SEC cryptocurrency project meaning that its ICO was regulated by the SEC and is fully compliant so investors do not have to worry about any SEC investigations further down the line.

The fact that it is cleared by the SEC allows for huge names in the cryptocurrency industry to have no qualms with affiliating themselves with Blockstacks. For example, just take a look at this picture below showing some famous figureheads in the cryptocurrency industry attending Blockstacks events;

Recognize some faces? Blockstack events have included prominent speakers such as Andreas Antonopoulos, Naval Ravikant (CEO of AngelList), and the one and only Edward Snowden! Snowden is worth a 300% price increase just on his own!

As more dApps start to be deployed on Blockstacks, there are currently over 270 already deployed, the network will grow exponentially and we can really expect this project to become one of the biggest in the industry at some point down the line. 

For the reasons stated above, and more discussed below, I believe that STX has the potential to surge by a total of 300% from the current trading price ($0.86) to reach my 2020 price prediction of $0.35. 

In this article, I’ll firstly cover a range of topics that I believe will influence STX in reaching my $0.35 target during 2020 and then analyze STX on the daily chart to highlight some areas of resistance on the way toward the target.

What Is Blockstack (STX)?

Blockstack is often described as a blockchain-based decentralized “new internet” platform that allows its users to fully own and control their own data as well as their identity. It is a decentralized computing network and ecosystem that allows for decentralized applications (dApps) to be built on top of it. These dApps are said to be hosted and run locally on the user’s machine which allows users to retain their own data such as text, images, videos, files, etc.

You can pretty much think of it as a new decentralized internet ecosystem. Users will only require a compatible browser to access everything on the Blockstack ecosystem.

From a technology viewpoint, Blockstack provides a full-stack alternative to traditional cloud computing to build private applications. These dApps are run on the client-side instead of utilizing centralized servers. It basically is using the existing internet transport layer and underlying communication protocols whilst removing points of centralization in the application layer.

The interesting thing about Blockstack is the fact that it was actually the first approved cryptocurrency by the SEC and was fully compliant when it conducted its ICO. Before gaining its SEC approval, it had already raised $50 million from accredited investors but was opened up to retail investors after the approval was granted. They received a “Regulation A+” of the 2012 Jumpstart Our Business Startups Act which allowed them to conduct the ICO.  

Find out more about their token launch here.

Blockstack is certainly gathering momentum especially when we consider the fact that they managed to hit the 1 million user milestone earlier in 2020.

Taking A Look At The Stacks Blockchain

The Stacks Blockchain is Blockstack’s foundational layer which provides the global consensus for the network and implements the Stacks Token (STX). STX is used as fuel for the users when they register digital assets on the Stacks blockchain such as usernames, storage licenses, nameservers, etc. It also used to register and execute smart contracts and is also used in transaction fees.

The blockchain itself uses Tunable Proofs that allows the blockchain to reuse the hash power from the Bitcoin blockchain itself (or any other blockchain). Using a Proof-of-Burn mechanism, the blockchain is secured when users burn the underlying blockchain (in this case, Bitcoin) which then allows them to commit to an initial set of transactions in the leader’s (miner) block.

This Proof-of-Burn mechanism allows the Stacks blockchain to have a high validation throughput. It also allows for participation without mining hardware (you are burning rather than conducting the PoW yourself) and for fair mining pools. 

Clarity Coding Language

Blockstack implements its own smart contract coding language which they have dubbed as Clarity and is slated to be optimized for security and predictability. It is non-Turing complete over a single transaction but it is Turing complete over the history of transactions. 

Blockstack also provides a strong developer library for developers to come and create dApps on the Blockstack network. It makes it easier for developers to build their own dApps and allows users to interact with different components of the Blockstack network through the applications. 

The SDK is designed in a way to hide that it hides the complexity of interacting with the Stacks blockchain to the decentralized storage so that developers can focus on coding their app. It includes a Javascript Web SDK and iOS and Android SDKs which provide all the APIs needed for implementing the authentication protocol, communicating with the Gaia servers (more on that next), and generating STX transactions.

Gaia Data Storage Solution

Blockstack has created a user-controlled storage solution that enables applications to interact with private data lockers. The data lockers are hosted by individuals and the blockchain records pointers to the location of the Gaia storage. 

This Gaia storage system is what gives users the control of their own data. Users can host these data lockers on a cloud provider or any other data storage option but the important thing is that they have the choice of where to host their data. Data on Gaia is encrypted and signed by user-controlled cryptographic keys. 

The key thing to understand is that end-users do not need to trust the underlying cloud providers as these storage providers are treated as “dum drives” as they only store encrypted data which means they will never be able to see the user’s data. 

What To Look Forward To In 2020

Blockstack’s roadmap is fairly straightforward and gets to the point quickly.

The big thing we can expect in 2020 is the release of Stacks 2.0 which will include a new proposed Proof-of-Transfer (PoX) mining mechanism. This will see miners on the network needing to post BTC to mine a block which will then get shared with nodes maintaining a copy of the ledger. 

This consensus mechanism will include miners and stackers. Miners will write blocks and earn 500 STX tokens per block in exchange for their BTC. The BTC is then distributed amongst the stackers who keep a copy of the blockchain on their node and vote on which version of the chain miners should mine on.

This PoX consensus mechanism is slated to use Bitcoin’s PoW to launch new blockchains that are anchored in Bitcoin’s security whilst giving incentives to earn Bitcoin rewards to participants of these newly launched blockchains.  

Stacks 2.0 will also come with simple client verification, higher throughput, smart contracts, app-specific tokens, and app chains. 

Other updates slated for Q2 2020 include bringing the Clarity smart contracting language on the main net which will allow fully-featured smart contracts and in-app financial services. 

Blockstack (STX) Price Analysis

LONG TERM - DAILY CHART

What Has Been Going On?

Taking a look at the daily chart above we can see that Blockstacks was dropping in the latter months of 2019 after it came onto exchanges. It dropped as low as $-.08 toward the end of the year and continued to remain range-bound between $0.09 and $0.11 during January 2020.

During February 2020, STX started to lift off as it climbed by a total of 165% to reach as high as $0.24. However, it quickly fell lower to close beneath the $0.20 level and went on to decline throughout the rest of the month.

During the March market collapse, we can see that STX dropped further lower to find support at $0.06. It has since started to grind higher but has been trapped within a range between $0.08 and $0.092 during the last 2-weeks of trading in March 2020. 

Are We Bullish Or Bearish (as of late March 2020)?

Currently, we can be considered pretty neutral, however, a drop beneath $0.08 would turn STX bearish again. It would need to rise and climb above $0.17 before we can consider STX to be turning bullish.

If the sellers do push lower, the first level of support is located at $0.08. Beneath this, support is expected at $0.068 (downside 1.414 Fib Extension), $0.06, and $0.05 (downside 1.618 Fib Extension). This bearish Fib Retracement is measured from the February high to the March low. Beneath this, additional support lies at $0.04, $0.034, and $0.03.

Where Is The Resistance On The Way Up TO $0.35?

On the other hand, if the buyers can start to push higher, the first level of resistance is located at $0.092 (bearish .236 Fib Retracement). Above this, resistance is located at $0.1.

Once $0.1 is broken, resistance can be found at $0.12, (bearish .382 Fib Retracement & 100-days EMA), $0.13, and $0.143 (bearish .5 Fib Retracement). If the bulls can continue above $0.15, added resistance is located at $0.166 (bearish .618 Fib Retracement), $0.18, and $0.2 (bearish .786 Fib Retracement).

Following this, resistance can be located at $0.218 (bearish .886 Fib Retracement), $0.24, and $0.25. Beyond $0.25, resistance lies at $0.28 (1.272 Fib Extension), $0.30 (1.414 Fib Extension), $0.32, and $0.33 (1.618 Fib Extension). If the buyers can clear these levels of resistance they will be clear to make an attempt at my 2020 price target of $0.35.

Conclusion

Blockstack is certainly a very strong project, especially when we consider the fact that it was founded in 2013 as this means that there is already over 7 years’ worth of research and development that has gone into its infrastructure. 

Furthermore, with the rise of dApps on the platform the user base will only continue to expand. There are already some great dApps on Blockstacks that you can take a look at such as MiniHabit, a habit tracker to build good habits and break bad ones, Arcane Sheets, an alternative to Google Sheers, and DCAST, a private podcast player and manager. 

Additionally, the fact that is SEC cleared really does help to bring in the big names to help promote and market this project. I mean, Edward Snowden is certainly worth the 300% price increase himself!

Given all that, my long term prediction is bullish, and if we hit the target of 300% we can see the price $0.35.