Stargate Finance (STG) Price Approaches Critical Support, What Next?
The price of Stargate Finance (STG) has touched a significant horizontal support zone, where a potential recovery could begin. However, both price action and indicators suggest it may break below this zone and decline further.
The price of Stargate Finance (STG) has been declining since it was rejected at the $0.71 resistance level in the week from August 7th to 14th (red arrow). This move brought the price back to a crucial support zone at $0.52 in the following week, creating a long wick below. A long wick indicates buying pressure at lower levels.
Indeed, STG formed a pin bar candlestick in the week from August 21st to 28th, neatly within the $0.52 support zone. This signaled the possibility of a recovery. However, instead of that, last week’s candle was a bearish engulfing candle, covering the previous pin bar candle. This is a very bearish signal as it shows that the buying pressure at $0.52 has been fully absorbed.
Therefore, there’s a possibility that the STG price may break below this zone and decline to the next important support level at $0.45 in the near future.
The weekly RSI indicator has also been rejected at the 50 levels, which coincides with the price being rejected at the $0.71 resistance level. It is currently trending downward. This reading supports the continuation of the downtrend.
Breaking the Short-Term Pattern
The daily chart supports the bearish outlook from the weekly timeframe. It shows that the price has broken below an ascending triangle pattern formed since May. Since this is a bullish pattern, breaking below it may create a bull trap followed by sharp declines.
A move lower equal to the height of the pattern when measured from the breakdown point could take the STG price down to $0.38.
The most likely outlook suggests that the STG price will continue to decline in the near future. The nearest target is $0.45, with a lower target at $0.38.
This perspective could be invalidated if the price reclaims the support of the ascending triangle at $0.59.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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