Stacks (STX) Price Drops 62% From Peak — Bearish Pattern Indicates Continued Decline

Key Takeaways

• STX price formed a head and shoulders pattern and has broken below the neckline.
• Stacks founder suggests the project could experience growth under Trump’s presidency.
• Despite the optimism, STX’s short-term outlook tilts toward a possible decline below $1.

The price of Stacks (STX), the native token of the Bitcoin layer-2 network, has significantly declined, now sitting 62% lower than its all-time high of $3.86.

This performance contradicts what STX holders expected from the aftermath of the Nakamoto upgrade. At press time, the altcoin’s value is $1.45, representing a 4.80% hike in the last 24 hours.

Despite the recent increase, this analysis reveals that STX price might find it challenging to sustain the uptick.

Stacks Slides Under Crucial Support

A look at the daily chart shows that STX price has formed a head and shoulders pattern. A head and shoulders pattern signals a potential reversal from an uptrend to a downtrend.

It consists of three peaks: a higher peak in the middle, known as the “head,” flanked by two lower peaks on either side, called the “shoulders.” The pattern completes when the price breaks below the “neckline,” a support level that is along the troughs between the head and shoulders.

According to the image below, the neckline of the STX/USD stands at $1.53. With the altcoin already below this level, there is a high chance that the cryptocurrency’s value might trade lower in the short term.

Long-Term Optimism Remains

Despite the decline, some market participants believe the STX price could recover these losses in the long term. This optimism comes from the perception that cryptocurrencies founded in the U.S. might gain priority under a potential Donald Trump presidency.

Muneeb Ali, founder of the Stacks project, also seem to share a similar view. In a statement posted on X, Ali noted that the work Stacks has put in over the last five years, would ensure that the project gains from the Trump presidency.

“Stacks was built right here in New York. first-ever SEC qualified offering and we did reporting like a public US company for 5 years. as a leading bitcoin L2, we’re not only excited about a BTC on-chain economy but what American entrepreneurs can build with Stacks rails & programmable bitcoin.” Ali highlighted on Jan. 21.

STX Price Prediction: Drop Below $1 Next?

Further evaluation of the daily chart shows that STX price has dropped below the 0.236 Fibonacci level. This Fib level is supposed to act as a minor pullback point.

But since the price has dropped below it, the Stacks crypto might experience an extended correction.

Besides that, the Awesome Oscillator (AO) is in the negative territory. The AO uses historical and recent price movements to measures momentum.

Positive values indicate an uptrend, while negative values indicate a downtrend. Therefore, the current position of the AO implies that STX faces bearish momentum.

Considering this current outlook, STX price is likely to drop toward $0.82.

However, if the token climbs above the 0.236 Fib level and demand jumps, this forecast might not come to pass. Instead, the price might experience a rally toward $2.69.