Will STX Bulls Break Higher Timeframe Trend Amid 25.8% Rally?

• Stack’s [STX] recent price movements are creating buzz amongst traders amid broader market fluctuations.
• Bulls have capitalized on short-term gains, but caution is advised regarding the long-term bearish trend.
• A significant observation includes an influx of capital as indicated by the Chaikin Money Flow (CMF) index.

Stay updated with the latest in crypto as STX shows potential amidst volatility – key movements analyzed.

Stacks [STX] Surges Amid Broad Market Activity

Over the past few days, Stacks [STX] has exhibited notable price movements, surging by 25.8% in just three days and gaining 13.25% in the last 24 hours. Contrary to this upward trend, Bitcoin [BTC] experienced a 1.75% drop within the same timeframe, underscoring increased volatility in the market, especially observed early Thursday.

Short-Key Supports and Resistance Levels

Recently, STX bulls have leveraged short-term momentum to push prices upward. The price fluctuations saw STX move from $57k to $58.3k, retract back, and yet defy the odds with another rise to $58k. However, the critical question remains: can this short-term bullish momentum translate into a longer-term trend reversal? The key psychological resistance at $2 hangs in the balance.

Targeting $1.8: A Point of Caution

Examining the lower timeframes, the bulls have shown promising signs. Early 2024 saw a successful defense at the $1.3 support level, facilitating a price rise. Additionally, overcoming the $1.5 resistance offers a short-lived victory, but anticipation remains for the next significant target of $1.8. Despite this optimism, traders need to exercise caution as the market structure on higher timeframes, particularly daily, remains bearish. The $1.8-$2 range represents a supply zone abundant with potential selling pressure.

Market Indicators: Capital Flow and RSI

From a technical analysis perspective, the CMF index on the daily chart recently crossed +0.05, a bullish signal indicating strong capital inflows. Although the RSI remains below 50 at 47, pointing to continuing bearish sentiments, an anticipated move beyond 50 could potentially mark the beginning of a trend change.

Will STX Experience Increased Volatility?

The upper movement beyond $1.5 on July 10 energized the bulls, but it also set the stage for potential southward liquidity hunting. Data indicates that long liquidations have outnumbered shorts, as positively shown by the cumulative liquidity levels delta. This scenario could trigger a downward pressure drive, forcing long liquidations, and potentially pushing prices below the current support at $1.51 towards $1.45 before any significant rise to the $1.8-$2 resistance zone.

Conclusion

While STX has demonstrated short-term bullish tendencies, caution is paramount due to the prevailing long-term bearish market structure. The significant resistance zone between $1.8-$2 could lead to heightened volatility. Traders should be prepared for possible liquidity-induced price shifts and remain vigilant of capital flow indicators for strategic positioning.