Well Paulina, I think you're right, Austin could support another hostel, but it would have to be a small one about 40-60 beds - any more than that, you would over capacitate the market. From my experience, the weekends are extremely busy and sell out a week or two ahead, and you are predominately catering for young Americans wanting to party on 6th Street. If you can handle young Americans on drunken weekends, then by all means open a hostel there!
Locationwise, you will need to be with in a 5-10 minute walk of 6th Street to make the most out of your hostel in Austin. From what I can gather, Austin is booming, and that means property prices are booming, so it might be difficult to make another hostel financially viable there.