Starknet Surges 19% – But ONE Resistance Could Hinder STRK's Rally

Starknet’s native cryptocurrency, STRK, experienced a remarkable 19% rebound, driven by significant inflows from investors. However, a critical resistance level at $0.177 could pose challenges for further gains.

Key Takeaways

A robust inflow of over $46 million from spot and derivative markets has propelled STRK's recovery, chiefly supported by long positions from investors.
The $0.177 price level, which previously coincided with notable price declines, may serve as a significant hurdle for future price increases.
Following a broader market liquidation resulting in $669 million in losses, STRK rapidly rebounded, fueled by fresh investor interest, though concerns remain regarding the sustainability of this movement.

Starknet rebounds 19% - But ONE price level could stop STRK's rally

Investor Activity Sparks STRK's Rise

The recent increase of 19% in STRK’s value is attributed to a wave of strong buying activity from investors, who are embracing the asset even in a generally bearish market. Within the last 48 hours, investors poured $3.8 million into STRK, indicating confidence in an otherwise challenging environment. Over the week, spot investors have accumulated $6.89 million worth of STRK, reversing a previous week's sell-off of $2.8 million, marking the first weekly net sales decline since Q1 of the current year.

STRK spot exchange netflow

Source: CoinGlass

In addition to spot purchases, there has been considerable inflow from the derivative market, amounting to $39.8 million in new contract positions within the past day. A favorable reading of the Weighted Funding Rate and Open Interest suggests that most of this activity is coming from long contracts, with buying volume outpacing selling volume in the market. However, despite the bullish trend in pricing, a notable resistance level has emerged that could precipitate a potential price reversal.

Potential Traffic Jam Ahead

Examining the chart patterns reveals that STRK has entered a crucial resistance zone at $0.177, which may obstruct any further price ascension. The previous instances of hitting this resistance were detrimental, leading to significant drops: an 84% decline on October 6th and a 37% decline on November 10th.

STRK price chart

Source: TradingView

If past events are indicative, STRK could potentially dip by as much as 46%, aligning with average loss percentages observed during previous sell-offs. On a brighter note, the upward curve suggests that STRK could be forming a classic inverted triangle pattern, often seen before an upcoming market rally, which in this case would be favorable for STRK.

Signs of a Potential Upswing?

Technical analysis indicates a possible deviation from the typical sell-off patterns encountered at this resistance level, as both indicators hint at bullish momentum. As of the latest updates, the MACD demonstrates a favorable trend, with both the blue line and signal line ascending on the chart, indicating that buying pressure may sustain a positive trajectory for STRK.

STRK technical indicator chart.

Source: TradingView

Moreover, the Money Flow Index (MFI) continues to rise, suggesting a steady inflow of capital into STRK, which reinforces the bullish outlook and hints at the possibility of continued growth for the asset. Overall, the positive sentiment surrounding STRK remains intact, indicating a strong likelihood for further rebounds ahead.