Stacks (STX) has experienced a significant 26% decline over the past week, with its price falling to around $1.71 at the time of writing. The cryptocurrency has dropped sharply, but it is approaching a crucial support level, which could signal a potential rebound. Currently, Stacks is testing support within an ascending channel, a technical pattern that typically signals a bullish long-term trend. This recent pullback could present an attractive buying opportunity for long-term investors, provided the key support holds.

Price Action and Recent Correction

The price of Stacks has recently suffered a major correction, falling by 26% over the past seven days, a pattern that aligns with the broader market decline. As of now, Stacks is nearing a critical support zone between $1.70 and $1.80, which has historically been a strong level of support. The price action over the last few days suggests that the correction is in line with typical market fluctuations, especially in long-term uptrends, which often see periods of price retracements.

Before the correction, Stacks had been trading well above $4.50, but now, it has pulled back 27.35%. Despite this sharp decline, the overall long-term trend remains positive. The current price level could be viewed as an accumulation zone for investors who believe in Stacks’ future growth.

Bullish Ascending Channel Formation

One of the key indicators for Stacks’ future price movement is the presence of an ascending channel. This pattern suggests a broader bullish trend, despite the current correction. An ascending channel is formed by two parallel trendlines: an upward-sloping support line and a resistance line. Stacks is currently near the lower boundary of this channel, which could act as a strong support level.

If the price maintains this support zone, it could signal a potential price recovery in the coming weeks. The upper boundary of the channel indicates that there is significant room for future price increases, with a target near $10. Therefore, if Stacks holds above the critical support levels, the long-term outlook remains positive, and a recovery could be on the horizon.

Key Support and Resistance Levels to Watch

As Stacks tests its crucial support zone, here are the key levels to monitor in the near term:

• Immediate Support: The most critical support zone lies between $1.70 and $1.80. This level has been tested several times in the past and has proven to be resilient. If the price bounces off this level, it could lead to a short-term rally.
• Resistance Levels: After the price holds at the support level, the next resistance targets are $2.40 and $2.50. A breakout above these levels could indicate a more significant upward movement, potentially pushing the price toward $3.00 or higher.
• Downside Risks: A break below $1.75 could signal further downside for Stacks. In that case, the next major support levels to watch would be $1.50 and $1.40. A breakdown below these levels could suggest a deeper correction in the price.

Analyzing Market Sentiment and Momentum

At the time of writing, the Awesome Oscillator (AO) is showing red bars, indicating that bearish momentum is currently in play. However, the histogram is beginning to decline in size, suggesting that the selling pressure may be waning. For a bullish reversal to occur, traders will be looking for green bars on the AO, which would signal an increase in buying momentum.

In addition, a breakout above the short-term resistance levels could further confirm that the market sentiment is turning positive. However, traders should remain cautious and watch the $1.75 support level closely to see if the price begins to recover.

What’s Next for Stacks?

Stacks is currently trading near a critical support level, and the upcoming days will be crucial for determining whether the price will rebound or continue to fall. The $1.75-$1.78 range is a key zone to watch, and if the price holds here, it could set the stage for a recovery. In that case, the next resistance levels to monitor would be $2.40 and $2.80.

However, if the support fails to hold, the price could test lower levels at $1.50 or $1.40, which would signal further downside. Overall, while the recent decline has been sharp, Stacks’ long-term potential remains intact, and investors should closely monitor price action for potential buying opportunities.

Conclusion

Stacks has faced a sharp correction, but it is currently testing key support levels within a long-term bullish trend. With the price near its lower boundary, this could be an ideal time for long-term investors to consider accumulating the token. However, traders should keep an eye on critical levels, such as $1.75 and $2.40, to determine the next move in the market. If the support holds, a recovery towards higher price levels could be expected, making Stacks an attractive investment for those who believe in its future growth.