Key takeaways
Why has Starknet rallied recently?
The rally is likely due to STRK staking accelerating, reaching 20% of the total token supply, combined with high buying volume over the past week.
What’s next for STRK?
High demand for organic produce and the possibility of a short-term squeeze means prices could potentially skyrocket in the coming days.
Starknet (STRK) is up 40% in 24 hours, with a commensurate increase in daily trading volume, according to CoinMarketCap. Its open interest increased by 51% during the same period, but its funding rate fell to negative values.
This meant that short trades were likely overloaded and futures traders believed prices would fall soon.
However, the evidence showed that underlying spot demand was strong for STRK, creating conditions for a short squeeze.
The STRK rally was likely triggered by several factors. Some of these included a high percentage of staked token supply. The increase in total value locked (TVL) also signaled an increase in the user base.
Implications of Breaking the STRK Range on Higher Timeframes
Source: STRK/USDT on TradingView
The weekly chart shows a 7-month long-term formation for Starknet.
This represents a long period of consolidation between $0.097 and $0.197. At the time of writing, a weekly session closing above the highs of the range was brewing and would be over in a few hours.
Additionally, the high trading volume and range breakout were extremely bullish, especially for long-term holders. For new traders looking to get started in trading, it’s not too late either.
They might need patience to enter the bull side during a retracement on a shorter time frame.
Old resistance turns into demand
The RSI rose above the neutral level 50 and the OBV surged higher. Both indicators highlighted the bullish force evident on the price charts. The next weekly swing levels were $0.539 and $0.8.
Source: STRK/USDT on TradingView
The former resistance area around $0.19 is now an area of strong demand. A retest of this area would provide a good buying opportunity.
The potential for short-squeezing means swing traders might not get the retracement they want. This is no reason for FOMO.
For next week, if the rally continues, the upside targets would be $0.279 and $0.293.
Disclaimer: The information presented does not constitute financial, investment, business or other advice and represents the opinion of the author only.
