Stacks price plunges hard after rallying 70% in a day — more STX losses ahead?

Stacks (STX) pared a sizeable information of the gains it made connected March 10 arsenic the euphoria surrounding its $165 cardinal pledge to enactment Bitcoin (BTC) projects showed signs of fading.

STX's terms dropped by implicit 30% to scope a level arsenic debased arsenic $1.33 connected Friday erstwhile measured from its week-to-date precocious of $1.94. The selloff, successful part, appeared method arsenic the $1.94-top fell successful the aforesaid scope that served arsenic coagulated enactment betwixt October 2021 and January 2022, lone to flip aboriginal to go a absorption area.

STX/USD regular terms chart. Source: TradingView

It besides appears that traders spotted selling opportunities owed to STX's agelong wick candlestick connected March 10. Stacks rallied by arsenic overmuch arsenic 73% into the time portion forming a disproportionally agelong bullish wick connected the regular illustration that hinted astatine upside exhaustion.

What pushed STX higher?

The rally successful the STX marketplace connected March 10 coincided with the motorboat of "Bitcoin Odyssey," a $165 cardinal money to make Web3, decentralized concern (DeFi), and nonfungible token (NFT) projects connected the Bitcoin blockchain by harnessing Stacks' open-source network for Bitcoin-based astute contracts.

Couldn't beryllium happier to denote that we've partnered with @Okcoin and @StacksOrg to motorboat a $165M ecosystem money to put successful Web3, Defi, and NFTs connected Bitcoin!https://t.co/VUDyEIHn8P via @cointelegraph

— trevor.btc (@TO) March 10, 2022

Notably, STX serves arsenic a inferior token wrong the Stacks ecosystem to wage for web enactment and declaration execution. STX owners tin besides involvement their holdings connected the Stacks web via "Stacking" to enactment its blockchain's statement mechanism. In return, they earn BTC rewards.

It appears traders flocked to acquisition STX en masse, anticipating a emergence successful its request aft the Bitcoin Odessey's launch. For instance, cryptocurrency speech OKcoin, the main backer down the $160-million-fund, promoted the Stacks token for its bullish outlook, saying it is "not a atrocious clip to get successful on" Stacks.

All-time precocious ahead?

Interestingly, STX's ongoing terms rally appeared astatine a confluence of 2 cardinal enactment levels, with astatine slightest 1 suggesting that the Stacks token is heading to a caller all-time precocious next.

This confluence comprises an upward sloping trendline that has acted arsenic an accumulation constituent for traders since aboriginal 2020 and the 0.5 Fib enactment (near $1.50) of the Fibonacci retracement graph made from $0.04-swing debased to $2.82-swing high. 

STX/USD play terms chart. Source: TradingView

STX present looks to adjacent supra its 2 interim exponential moving averages (EMA) — the 20-week (green) and the 50-week (red) EMAs — pursuing its rebound from the dual-support area. A palmy breakout whitethorn person the Stacks token retest different upward sloping trendline that has served arsenic a absorption level since 2020.

Related: Bitcoin spikes supra $40K arsenic Russia sees 'positive shifts' successful Ukraine warfare dialogue

Conversely, a pullback from the 20-50 EMA resistances could person STX interruption beneath its ascending trendline enactment toward 0.786 Fib enactment adjacent $0.63.

The views and opinions expressed present are solely those of the writer and bash not needfully bespeak the views of Cointelegraph.com. Every concern and trading determination involves risk, you should behaviour your ain probe erstwhile making a decision.