Analyzing Starknet’s Breakout: Insights from a 7-Month Range

The recent surge in Starknet's price is largely attributed to a significant increase in STRK staking, which has now reached 20% of the total token supply, alongside a spike in buying volume observed over the past week.
Strong organic demand and the possibility of a short squeeze suggest that prices could experience a substantial increase soon.
Starknet's token, STRK, witnessed a 40% rally within 24 hours, accompanied by a notable rise in daily trading volumes. CoinMarketCap also reported a 51% increase in Open Interest during this timeframe, despite a drop in the funding rate indicating a crowded short trade.
Data provided insights showing robust demand in the spot market for STRK, creating conditions favorable for a potential short squeeze.
A variety of factors contributed to the STRK rally, including a high percentage of staked token supply and an increase in Total Value Locked (TVL), indicating a growing user base.

Key Takeaways

The recent surge in Starknet's price is largely attributed to a significant increase in STRK staking, which has now reached 20% of the total token supply, alongside a spike in buying volume observed over the past week.
Strong organic demand and the possibility of a short squeeze suggest that prices could experience a substantial increase soon.
Starknet's token, STRK, witnessed a 40% rally within 24 hours, accompanied by a notable rise in daily trading volumes. CoinMarketCap also reported a 51% increase in Open Interest during this timeframe, despite a drop in the funding rate indicating a crowded short trade.
Data provided insights showing robust demand in the spot market for STRK, creating conditions favorable for a potential short squeeze.
A variety of factors contributed to the STRK rally, including a high percentage of staked token supply and an increase in Total Value Locked (TVL), indicating a growing user base.

The 7-month Starknet consolidation ends as bulls spring into action- What next?

Implications of the STRK Breakout on Higher Timeframes

Starknet 1-week Chart Source: STRK/USDT on TradingView

The weekly chart illustrates a 7-month-long range formation for Starknet, indicating a consolidation phase between $0.097 and $0.197. At the time of this analysis, a weekly close above these highs was on the horizon.

Additionally, the high trading volumes coupled with the breakout from this range signify strong bullish sentiment, particularly for long-term investors. New traders entering the market should bide their time for a potential retracement on shorter timeframes before joining the bulls.

Transformation of Former Resistance into Demand

The Relative Strength Index (RSI) has moved above the neutral 50 line, while the On-Balance Volume (OBV) has increased, both of which highlight robust bullish momentum reflected in the price charts. The next targets for weekly swings are projected at $0.539 and $0.8.

Starknet 4-hour Chart Source: STRK/USDT on TradingView

The previous resistance area around $0.19 has transformed into a strong demand zone. A retest of this level could present a favorable buying opportunity. However, due to the potential for a short squeeze, swing traders might not find the desired retracement. This is not a cause for panic buying, or FOMO.

If the upward momentum continues over the next week, bullish targets are set at $0.279 and $0.293.

Disclaimer: The information provided here is not intended as financial, investment, or trading advice and reflects solely the opinion of the author.