STX rebounds after retesting $0.91 support, traders should watch out for…
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
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- STX’s market structure remained strongly bullish on higher timeframes.
- More gains looked likely, but traders can watch out for two resistance levels overhead.
Stacks [STX] has been in a downtrend on the daily timeframe from January 2022 to February 2023. Since the breakout past the $0.314 resistance in February, STX has registered gains of 236% at the time of writing.
Read Stacks’ [STX] Price Prediction 2023-24
If measured to the swing high at $1.31 instead of current prices, those gains would amount to 315%. Bitcoin Ordinals could explain some of these gains, as the sentiment has been extremely positive recently. But should investors be wary of the TVL figures, and could the uptrend taper off?
STX bulls maintain the bullish structure on the charts
The daily timeframe showed that, despite the large dip from $1.25 to $0.91 a week ago, the trend remained pointed toward the moon. The price has made a series of higher lows and higher highs after the breakout past $0.31 back in January.
To the north, the pool of liquidity at $1.25-$1.3 will likely be tested once again since the trend remained bullish. However, around the $1.35 zone, the possibility of a reversal could arise and buyers can look to de-risk their positions from lower on the charts. Beyond this zone was a bearish order block at $1.5, highlighted in red, where buyers can look to take profits.
Staking in the protocol has decreased over the past month, as has the number of daily active users. Could this spell the beginning of the end of the glorious run on the price charts? A drop below $0.91 would flip the daily bias to bearish.
Realistic or not, here’s STX’s market cap in BTC’s terms
Early short sellers pay the price
On the 15-minute timeframe, the spot CVD has been in an uptrend over the past few days. This supported the idea of strong demand after a retest of the $0.91 level. However, over the past couple of days, the funding rate was negative.
Moreover, one of the sharp upward pushes on the lower timeframes was accompanied by a decline in Open Interest. Specifically, the move from $0.92 to $1.05 noted a drop in OI. The OI has not climbed past Monday’s highs despite how bullish the past 18 hours have been. Liquidation data showed some short positions blown out of the water as well.