Can Starknet (STRK) Price Reverse the Downtrend Soon?
Starknet (STRK) has been experiencing a significant decline, with its price dropping by almost 90% from its peak in the first quarter. However, despite the overall downtrend in the market, STRK has shown some resistance and performed better than other leading cryptocurrencies. In the past day, the price of STRK has increased by about 2.30% to reach $0.3673.
Unlike most altcoins that tend to follow Bitcoin’s price movement, STRK has shown less correlation with BTC, with a correlation score of 0.62. This makes STRK somewhat of an exception in the market.
While many investors were hoping for a strong recovery, the bearish long-term narrative of STRK’s price has not changed yet. The price of STRK has been consistently held back by the 20-day and 50-day exponential moving average (EMA) bands.
One possible explanation for the weak buying pressure on STRK could be its market dynamics. Despite having a total supply of 10 billion tokens, only 17.80% of STRK is currently in circulation. This means that there are relatively few tokens available for trading, which could limit the buying pressure on the cryptocurrency. On top of that, a significant number of STRK holders are currently at a loss, with 84.99% of them holding positions that have decreased in value.
Given the price performance in August and the on-chain research data, there are two theories that arise. Firstly, the low buying pressure could indicate heavy accumulation at lower levels, suggesting a potential buy-on-dip opportunity. Secondly, concerns among investors regarding STRK’s supply dynamics could be hindering its price movement.
Looking at the daily chart, STRK has been in a downward wedge pattern since March 2024. The price fell after failing to break above the all-time high of $2.780 on March 13th. It reached a low of $1.11 in mid-April before consolidating within a horizontal range. STRK struggled to surpass the $1.36 resistance level, eventually falling below $1 and reaching $0.460 in mid-July.
In August 2024, a sideways movement similar to that of April has started, which could potentially lead to an extended bearish phase. However, if STRK manages to break above the $0.637 resistance level, it could signal a bullish confirmation and potentially initiate a major uptrend.
In conclusion, while STRK has shown some resilience compared to other cryptocurrencies, it is still trapped in a downtrend. Its market dynamics and lack of significant buying pressure, along with its failed attempts to break key resistance levels, suggest that reversing the downtrend may require further bullish confirmation.