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Stacks (STX) price resulted in the crypto asset joining the list of altcoins that have begun recovering their lost profits during the recent decline.
But the STX investors are too hasty. They attempt to profit from the bearishness instead of pushing for recovery.
Stacks Investors Expect a Decline
The STX price has significantly risen in the last few days, pushing the altcoin to a multi-week high. Consequently, STX’s Relative Strength Index (RSI) is showing signs of bullish momentum for the first time in a month.
This technical indicator measures the magnitude of recent price changes to evaluate overbought or oversold conditions. It suggests a shift towards increased buying pressure. The RSI moving into the bullish zone is often seen as a positive signal, indicating potential upward price movement.
The rise in RSI also reflects growing interest and optimism among investors. Consequently, the bullish RSI can act as a catalyst for sustained price growth.
Contrarily, STX’s funding rate has experienced a notable decline, turning negative. The funding rate, which is the cost incurred to hold a position in a futures contract, typically indicates the balance between long and short positions. A negative funding rate suggests that short contracts are dominating the market.
The sharp drop in the funding rate highlights a growing bearish sentiment among market participants. This scenario arises when traders anticipate a decline in STX’s price and open short positions to profit from the expected downtrend. This could exert downward pressure on the price, counteracting the bullish signals from the RSI.
Overall, the market for STX is currently exhibiting mixed signals, with investors attempting to derail the recovery.
STX Price Prediction: Resistances Are in Place
STX price marked a sharp recovery of 19% in the last 24 hours, pushing the altcoin to trade at $1.66. In doing so, Stacks bounced off the support floor of $1.24, now attempting to rally to $1.80.
The chances of breaching this barrier are slim since the aforementioned factors hint at a bearishness from the investors. This could hamper any attempts made by the altcoin to rally.
The likely outcome is consolidation within $1.80 and $1.53, both of which have been tested as resistance and support, respectively.
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However, if the latter level is lost as support, a drawdown to $1.24 is likely. This would invalidate the bullish thesis and leave STX price vulnerable to further decline.