The Stacks price is reversing hard from the ‘Jack Dorsey pump’ earlier this week, which could drive STX back below $2.000 soon.
Stacks (STX) jumped over 90% this week after Jack Dorsey stepped down as CEO of Twitter to focus full-time on Bitcoin. Traders rushed to gain exposure to Stacks, wagering the layer-1 network for smart contracts on Bitcoin appears on Dorsey’s radar. The three-day buying spree sent the STX token to a record price of $3.375 on Wednesday, lifting the projects market cap to approximately $4.2 billion. However, the gains were short-lived, with STX changing hands 25% lower this morning. As a result, Stacks’ market cap has shrunk to $3.2 billion, ranking it the 55th most valuable cryptocurrency behind PancakeSwap.
The daily chart shows the Stacks price correction is gathering pace. Notably, STX is starting to break down below support of the mid-November highs around $2.560. In my opinion, a close down here could encourage stop-loss selling from longs that added at the top of the range. If that proves true, Stacks could be in for more weakness in the coming sessions.
A logical downside target is the 100-Day Moving Average at $1.816, which was the base of the recent rally. However, the pessimistic scenario may not play out if STX finishes the day above $2.560.
On that basis, I am bearish on a daily close below $2.560, targeting the $1.800 area, but a close above that level invalidates the thesis.
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This post was last modified on Dec 03, 2021, 02:09 GMT 02:09