Stargate Finance (STG) Price Faces A Potential Sell-off, Here’s Why?
The price of Stargate Finance (STG) has broken down below a significant support level with a bearish engulfing candle, indicating a potential sell-off in the near future.
Breakdown of significant support
The price of Stargate Finance (STG) has been declining since reaching a yearly high of $1.38 on February 13, 2023. During this period, the price has bounced up from the support level of $0.6 several times, most recently on May 15 (blue arrow).
This bounce has helped form a morning star pattern (green ellipse) for the STG price. This is a bullish pattern that often leads to a trend reversal to the upside.
However, the price has broken down below the $0.6 support level last week with a bearish engulfing candle, invalidating the bullish pattern. This is an extremely bearish development as it traps the bulls and often leads to a subsequent sell-off.
Furthermore, the bearish engulfing candle pattern indicates that the bears has taken full control of the market.
If so, the STG price could potentially decline to the next horizontal support level at $0.44 and even lower to $0.35.
The RSI indicator supports this possibility as it has dropped below the 50 level and is sloping downwards.
Short-term outlook
The 4-hour chart shows that the price has recovered since reaching its lowest point at $0.52 on June 10 and is currently attempting to break out of a consolidation range in the past few days. However, the buying pressure seems weak as the STG price is still significantly below the high of the large bearish candle at $0.60.
Therefore, this could be a temporary recovery within a downtrend, and another downward move may follow soon.
If the price breaks out above the range, it could rise towards the descending resistance line at $0.6, coinciding with the high of the large bearish candle. However, if the price falls back within the range, it is likely to break down below the range and continue the downtrend.
Conclusion
The STG price is currently experiencing a recovery after a strong sell-off. However, technical indicators suggest that this is a dead cat bounce, and the price is likely to continue its decline in the near future. Potential targets are found at $0.44 and even lower at $0.35.
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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