Stacks price shows 15% upside potential, tops, before a possible nosedive
- Stacks token price uptrend could run out of steam soon, with only a 15% climb until the end of the line.
- STX could face a rejection from the $0.8860 resistance level, kickstarting a steep correction towards the ascending trendline.
- The bearish thesis will be invalidated upon a break and close above the $0.8860 resistance level
Stacks (STX) price is trading with a bullish bias, recording a steady uptrend as part of a recovery rally. However, this optimism could run out of steam soon amid increasing volatility.
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Stacks price coils up for a correction
Stacks (STX) price has a bit of upside potential left. It could climb 15% at most before a correction, with the position of the Relative Strength Index (RSI) at 69 shows that STX could soon be overbought once it crosses above the 70 level. This could precipitate a correction.
The Awesome Oscillator (AO) is still in the positive territory, showing the bulls maintain a presence in the STX market. Meanwhile, evidence of increasing volatility can be seen in the Bollinger Bands widening, increasing the risk in the STX market.
With this outlook, early profit-taking, spooked by volatility-related risk could see Stacks price face a rejection from the upper band of the Bollinger Bands, pulling south to break below the midline (yellow band) of the indicator at $0.6227. In the dire case, the slump could extend for the price to lose the support offered by the lower band, which almost confluences with the ascending trendline at $0.4713.
STX/USDT 1-day chart
On the flipside, increased buying pressure could see Stacks price breach the upper band of the Bollinger Band indicator at $0.7741 before a possible extension to the $0.8860 resistance level, which could mark the take profit level for the less conservative traders. However, the more conservative ones should consider placing their take profits slightly lower.
If Stacks price breaks and closes above the $0.8860, it would not only invalidate the expected bearish thesis, but also clear the path for a continuation of the trend, potentially going as high as the supply zone extending from $1.0638 to $1.1568. A break and close above the midline of this order block at $1.1123 would confirm the continuation of the uptrend.
Author
Lockridge Okoth
FXStreet
Lockridge is a believer in the transformative power of crypto and the blockchain industry.
