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YEREVAN (CoinChapter.com) — The price of Stacks (STX) reached $1.14 on December 5th, experiencing a significant rally of 60% for the week and 162% from its mid-September low. This surge was largely driven by the overall bullish wave in the market, which was influenced by the rally of Bitcoin. However, technical analysis suggests that the recent gains of STX may be pared back.The price action of STX formed a technical pattern known as the “double top,” which is often seen as an indication of a reversal in an upward trend. This pattern resembles the letter “M” and occurs when the price of an asset rises to a high, retraces, and then rises to the same high again before declining once more. Traders typically consider the pattern complete and expect a reversal when the price falls below the support level, which is the lowest point between the two peaks.If the pattern is confirmed, the target price for STX would be below $0.44, meaning that the token could potentially lose over 60% of its value, erasing the recent gains. As of December 5th, the confirmation of the pattern had not yet occurred, but the price of STX retested the “double top” level as resistance, which could lead to further losses.Furthermore, the relative strength index (RSI) of STX charted through “overbought” territory above 70, indicating a potential market exit point for profitable trades. If enough investors decide to take profit, the price of STX could drop even further.It is important to note that the rally of Stacks STX was primarily driven by the surge in Bitcoin. The reasons behind Bitcoin’s uptrend are also noteworthy. The rally was fueled by “panic buying” as traders and investors rushed into Bitcoin due to favorable market conditions. Additionally, the elevated levels of Bitcoin perpetual futures premium versus the spot price, as noted by crypto investment services provider Matrixport, suggested a fear of missing out (FOMO) driving the markets.Bitcoin’s demand surge helped it break through significant resistance at $38,000, a level that had been capping prices for most of November. As a result, Bitcoin achieved a fresh 19-month high above $42,000.Market participants were also betting on lower interest rates, with an 86% probability of a lower Fed funds rate by May, according to the CME FedWatch tool. This expectation was based on dovish talk from some Federal Reserve officials, a weakening dollar, and relatively strong domestic data.Furthermore, investors continued to invest in crypto funds, with asset manager CoinShares reporting another $172 million of net inflows last week. This steady inflow of investment into crypto funds indicates a sustained interest in digital assets, including Bitcoin.In summary, the price of Stacks (STX) experienced a significant rally driven by the overall bullish wave in the market, largely influenced by the surge in Bitcoin. However, technical analysis suggests that the recent gains of STX may be reversed. The confirmation of a “double top” pattern could lead to a potential loss of over 60% in value. Additionally, the relative strength index (RSI) indicates a potential market exit point. The rally of Bitcoin was fueled by panic buying and the fear of missing out (FOMO) among traders and investors. Bitcoin’s surge was also supported by expectations of lower interest rates and continued investment in crypto funds.