Stacks price spikes as BTC soars above $27k: Is it a buy now?
Stacks crypto price has jumped by over 11% from its lowest level last week.
The coin jumped after Bitcoin soared above $27,000.
Stacks price jumped by more than six percent on Monday as cryptocurrency recovery continued. The STX token rose to a high of $0.5023, the highest level since August 31st. It has risen by more than 13% from the lowest level this year.
Bitcoin price spikes above $27k
There was no Stacks-specific news that helped to push its token price higher. Therefore, this price action was mostly because of the performance of Bitcoin, which flipped the important resistance at $27,000 on Monday. This was a major recovery since Bitcoin crashed below $25,000 on Monday last week.
It is unclear why cryptocurrencies are rising. A likely reason is that investors are waiting for the upcoming Federal Reserve interest rates decision scheduled for Wednesday. Most analysts expect the Fed to leave interest rates unchanged at 0.25%.
The Fed decision comes at a difficult time for the American economy. The most recent data showed that the country’s inflation rose from 3.2% in July to 3.7% in August. At the same time, retail sales were strong even as inflation and interest rates rose.
The US is also going through a major strike, which was called by the United Auto Workers (UAW). This strike has seen workers in the biggest car plants in the US down their tools and analysts expect that the strike could go on for a while. Therefore, the Fed will likely decide to pause and assess the state of the economy.
The Stacks comeback led to an increase in shorts liquidations. Data by CoinGlass showed that shorts liquidations rose to $60k, the highest level since September 5th. Also, Stacks open interest in the futures market rose. It jumped by more than 28% in the past 22% to over $28.3 million.
Stacks price forecast
The daily chart shows that the STX crypto price has been moving sideways in the past few days. It has found a strong support at $0.4176, the lowest level since last week. Despite the comeback, the coin remains below the 50-day moving average and the descending trendline shown in black. This trendline connects the highest level since June 26th.
Therefore, I suspect that the coin will resume the bearish trend in the coming days. A bearish breakout will be confirmed if it moves below the support at $0.4176. The stop-loss of this trade will be at $0.5500.
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