KEY TAKEAWAYS

• Stacks (STX) bounced at the $0.53 horizontal support area.

• The STX price broke out from a descending wedge pattern.

• Can STX sustain its momentum and move above $1?

Stacks (STX) has been on a tear lately, climbing 45% since its low on April 7 and outpacing much of the crypto market with another strong push last week.

Part of the surge comes down to momentum on multiple fronts. The Stacks team announced that STX is now listed on all of the top 15 major exchanges, some even offering staking, giving the token more utility and exposure.

Meanwhile, the ecosystem itself is gaining steam. After landing in the top ten fastest-growing ecosystems in 2024, Stacks is setting its sights higher, aiming for a top-five spot this year.

With price and fundamentals moving in sync, the big question is how much further this rally can go.

STX Price Bounces

STX has been in recovery mode after a long descent from its all-time high of $3.84 in April 2024.

Following a steady decline and a lower high in December, the downtrend picked up speed. It eventually bottomed out at $0.47 earlier this month, right above the $0.50 support zone.

That $0.50 level has been pivotal since 2021, multiple times flipping between resistance and support.

Once again, it held firm. STX bounced strongly off the area, forming a bullish engulfing candle—a sign that buyers stepped in right when it mattered most.

Still, it’s too early to call this a full-blown trend reversal.

While the Moving Average Convergence/Divergence (MACD) is close to making a bullish cross (black circle), it has not done so yet.

Also, the Relative Strength Index (RSI) bounced but is still below 50.

So, the weekly time frame does not confirm whether STX has started a bullish trend reversal.

Will the STX Rally Continue?

The daily time frame chart gives a bullish STX price prediction for several reasons.

Firstly, the wave count shows a completed five-wave downward movement since the all-time high.

The final portion of the move developed into an ending diagonal, known as a bullish pattern.

Finally, the daily RSI and MACD have generated bullish divergences (orange), legitimizing the breakout.

The closest resistance is at $0.75, and if it breaks out, the STX price can move to the next resistances at $1.05 and $1.45, respectively.

Despite the positive short-term outlook, the weekly chart suggests the long-term STX trend is bearish.

The Stacks price completed a five-wave upward movement (green) starting in November 2022, which ended its bullish cycle.

The ongoing decline will likely be a five-wave decrease rather than an A-B-C correction because wave three is over 1.61 times larger than wave one, which rarely happens between waves A and C.

So, if the count is accurate, the STX price is in wave four of this five-wave decrease.

After reaching a high near $1, another downward movement is likely.

Relief Rally Before New Lows

The STX price bounced in April, creating a bullish candlestick and validating the $0.50 support area.

Stacks broke out from a short-term descending wedge, accelerating its upward movement.

However, the wave count suggests the breakout is a relief rally, and STX will reach a local top of around $1.