beincrypto.com
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.
Read More: Top 10 Aspiring Crypto Coins for 2024
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.