Stacks Sees 23% Surge as Buyers Enter the Market – What’s Next for STX?

Summary:
Stacks (STX) has experienced a significant price increase of 23%, breaking a multi-month downtrend and hitting a two-month high of $0.37. With futures trading volumes and open interest rising, market sentiment appears overwhelmingly bullish. However, there are mixed signals, including the potential for profit-taking that could impact the future trajectory of STX.

Key Takeaways

Stacks (STX) rallied 23% from $0.30 to $0.37, showing strong upward momentum.
Futures market activity has increased, indicating heightened trader interest.
Buyers in the market are demonstrating stronger control and accumulating STX.
The Stochastic Momentum Index shows bullish signs, suggesting potential further gains.
Profit-taking may pose a risk that could impact future price movements.

Stacks Surges 23%, Hits a 2-Month High: Is $0.45 Target Within Reach for STX?

Stacks Breaks Free from Downtrend

Stacks recently broke away from a prolonged downtrend after bouncing back from a low of $0.25 last week. This recovery led to a notable 23% price increase, climbing from $0.30 to a peak of $0.37 before experiencing a small retreat. The upward movement has established a pattern of higher lows, suggesting a continuation of the bullish trend on price charts.

Currently, Stacks [STX] is trading around $0.35, reflecting a daily increase of 10.2%. Trading volume surged 52%, reaching $84 million, while the total market capitalization exceeded $600 million. This raises an important question: can this momentum be sustained?

Increased Futures Activity for STX

As the upside momentum strengthened, Stacks observed a significant change in futures positioning. Traders are now allocating new capital toward long positions, resulting in a recovery of critical price levels. According to data from CoinGlass, open interest increased by 10% to a three-month high of $27 million. In the same timeframe, derivatives trading volume rose by 31%, totaling $137 million.

Stacks open interest

This development aligns with a $41 million uptick in futures flows, indicating growing trader engagement. Additionally, aggregated funding rates turned positive at 0.005%, suggesting that long positions dominated the market as traders were willing to pay fees to maintain their bullish stance.

Stacks funding rate

Buyers Show Strong Commitment

Beyond the futures market, a robust demand from buyers suggests genuine accumulation rather than merely a temporary uptick. Evidence of this commitment is clear in the data comparing buyer and seller dominance. The Net Dominance metric increased by 17%, with buyers rising to 2.07 and sellers dropping to -2.99.

STX accumulation distribution volume

The surge in buying activity has shifted the momentum decisively to the bullish side, indicating strong market interest. The accumulation/distribution volume for Stacks climbed to 6.3 million, with total volume also rising to 7.3 million. This influx of capital signifies that buyers are investing heavily in Stacks, further corroborating the strength of the current trend.

Assessing the Sustainability of STX's Rally

Stacks’ recent strong performance, driven by increased demand in the futures market and proactive buying, has positioned the altcoin favorably. The Stochastic Momentum Index (SMI) recently rose to 68, indicating solid upward momentum. Generally, when this indicator moves deep into bullish territory, it signals a trend primarily driven by buyers. Therefore, if demand persists, continued upward movement is likely.

Stacks SMI & FBB

Should the positive momentum continue, STX may convert $0.40 into a support level and set its sights on reaching $0.45 next. However, the Fibonacci Bollinger Bands midline near $0.52 constitutes a more formidable resistance.

On the other hand, profit-taking among holders who have been in the market since November could potentially hinder the rally. In that case, the price could revisit the support zone around $0.308.

Final Thoughts

The recent performance of Stacks demonstrates a revitalized interest from buyers and traders writing on Futures. While there are signs of a sustainable upward movement, watchful investors should consider the potential risks posed by profit-taking and market corrections. As always, staying informed and aware of market dynamics is crucial when navigating the complex world of cryptocurrency.