Stacks (STX) has been facing a challenging market environment, aligning with the broader downturn in the cryptocurrency market. After reaching a peak of around $2.5 in December 2024, the price of STX has steadily fallen, with each subsequent peak lower than the previous one. As of now, STX is trading below all key exponential moving averages (EMAs), including the 20 EMA, 50 EMA, and 200 EMA—typically a bearish sign for price action. Despite this, recent price movements suggest that STX might be on the verge of a potential recovery, provided it can break certain resistance levels.

Key Levels to Watch for Stacks (STX)

Currently priced around $0.861, STX has recently experienced a small rebound, rising by nearly 8% over the past day. However, for this rebound to signal a true reversal, STX must close above key resistance levels. The 20 EMA, located at approximately $0.92, is the nearest dynamic resistance that traders are watching closely. A daily close above this level would indicate a shift in momentum, suggesting that a short-term reversal could be underway.

In contrast, the long-term outlook for STX remains bearish as the price continues to trade below the 200 EMA. This long-term indicator suggests that the broader market sentiment remains weak unless the price can convincingly break above this level and maintain momentum above it.

For immediate price support, the $0.74 zone will be crucial for determining STX’s next move. If the price drops below this level, further downside risks could materialize, and STX could test a deeper support zone between $0.55 and $0.57.

Broader Market Influence and Recent Price Action

Stacks’ performance is also influenced by the broader market trends, which have been bearish due to rising uncertainty surrounding cryptocurrency exchanges. A recent hack of Bybit’s $1.4 billion worth of ETH has added to this uncertainty, putting additional pressure on the market. If the broader crypto market weakens further, STX might follow suit, testing the support levels mentioned above.

The daily chart for STX reveals a descending channel from its peak of $2.7 to the most recent lows, which forms a bearish wedge pattern. If STX can sustain above this channel, it may set the stage for a rebound. A crucial part of this rebound would be breaking above the key moving averages and establishing higher lows, which would signal that the downtrend is weakening.

RSI and Divergence Indicate Possible Reversal

Another key indicator to watch is the Relative Strength Index (RSI), which is currently below 40, indicating that selling pressure is still in control. However, the RSI is showing signs of bullish divergence, as it is beginning to trend upward despite the price continuing to fall. This divergence suggests that selling pressure might be easing, and a stronger near-term rebound could be likely if the RSI breaks above the 50 midline.

What’s Next for STX?

For traders, the next crucial step is for STX to close above $0.92 (the 20 EMA), which would serve as an early confirmation of bullish momentum returning. A stronger signal would be a reclaiming of the $1.14 to $1.20 range, where the 50 EMA intersects with a major horizontal resistance zone. However, in a bearish market, rallies into key resistance zones often attract selling pressure, so it will be important to watch for volume trends and ensure that the price can hold above these levels, rather than just briefly spiking above them.

Conclusion

Stacks (STX) is at a critical juncture. The recent breakout above the $0.74 support zone and the potential for a close above the $0.92 resistance level could signal the beginning of a short-term reversal. However, STX still faces significant challenges, including its position below key moving averages and the broader market’s downturn. Traders will need to monitor key levels and watch for confirmation through volume and RSI movement to determine if STX can defy the broader market trends and establish a recovery.