Will STX see some upside after its latest 8% price drop?

Stacks [STX] declined notably over the past 24 hours, accounting for an 8% drop in price to $0.345. This dragged its 7-day performance down by 15%.

The bears’ dominance seemed to persist due to capital conditions in the market. However, the possibility of a rebound might be on the table as investors across multiple venues maintain their positions.

STX capital outflows rise

The fall seen in STX has been driven largely by capital flows across the asset’s perpetual market.

Open Interest, which measures the capital in an asset’s perpetual market, saw a major decline of more than 7% in just 24 hours.

According to CoinGlass, this brought the total capital positions in the STX perpetual market down to roughly $47.13 million at press time.

The decline in Open Interest also matched the capital outflows recorded in the asset’s perpetual market. In fact, CoinGlass revealed that capital inflows and outflows in the STX perpetual market recorded roughly $13.19 million in outflows. All while the asset’s netflows stood at around -$1.10 million.

Shrinking capital does not dictate market direction on its own. However, when market sentiment is negative, it usually means that investors are bearish. Hence, the likelihood of a potential drop in the present case might be high.

Funding Rates favor bulls

While capital in the STX perpetual market has shrunk, data showed that the available capital was in favor of a possible upside rebound.

For instance, the Open Interest-Weighted Funding Rate, which tracks funding rates relative to positions in an asset’s perpetual market, whether long or short, revealed that long positions dominated market positioning.

At the time of writing, the Open Interest-Weighted Funding Rate stood at 0.0041%. A positive funding rate means that a majority of contract positions may be anticipating an upside.

Usually, the price tends to align with Funding Rate positioning on the chart. In this case, it implied that there may be a strong possibility that STX might see an upswing in the short to near term.

What about the buying volume?

Finally, tracking perpetual market volume activity revealed that buy volume has exceeded sell volume across key exchanges.

OKX, MEXC, and LBank all saw a surge in STX buying volume in the perpetual market, supporting the possibility that the asset could see an upswing.

Across these exchanges, the buying volume share remained above 50%. Notably, a more bullish scenario would involve buying volume turning higher across more exchanges, supporting the rally.

• Positive Funding Rates of 0.0041% and buying volume above 50% across Bybit, WhiteBIT, and Aster hinted at a possible rebound.