Stargate Finance (STG) price has bounced off a key horizontal support area. It can retest the parallel channel it broke earlier.
Stargate Finance (STG) price broke below an ascending parallel channel on May 7, marking the continuation of the downtrend. This pattern has a target of $0.42, calculated by connecting the height of the pattern to the breakout point.
Even so, the bulls have held onto the critical $0.6 support area, which has provided support for the STG price since January 2023. It has also formed a double bottom in the process.
Therefore, STG price can rally to the $0.78 resistance area, which is formed by the horizontal resistance area and the support line of the parallel channel.
The daily RSI favors the recovery as it creates a bullish divergence and is sloping up.
However, due to the previous parallel channel break, the main trend is still down. A break below the $0.6 support area will mark the continuation of the downtrend. After that, STG price will drop to the channel target at $0.42.
Daily STG/USDT Chart | Source: TradingView
The 4-hour chart supports the bullish view from the daily timeframe. It shows that STG price has broken above the descending resistance line, which has been formed since the local high of $0.95.
This shows that selling pressure has weakened. Therefore, STG price is likely to rally towards the next horizontal resistance at $0.69.
STG/USDT 4-hour chart | Source: TradingView
Technical indicators show that STG price will recover in the short term. The nearest target is $0.69 and higher to $0.78.
However, a break below the $0.6 support area will mark the continuation of the downtrend. After that, the STG price will drop to $0.42.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.
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According to AzcoinNews
