Starknet (STRK) has faced a difficult past year, with the asset seeing several lows and declining nearly 59% over the period.
However, the recent decline has shown signs of reversal, with the token rising 13% in the current trading session, with market indicators pointing towards the possibility of a larger recovery in the near term.
STRK forms a bullish structural pattern
STRK rallied after breaking above the resistance level of a cup-and-handle pattern on the chart, pushing the asset higher after the breakout formation.
The cup-and-handle pattern is widely considered a classic bullish continuation structure that often develops before a sustained market rally, as currently seen with STRK.
At the moment, the asset is likely to face a major hurdle at the 1.0 Fibonacci resistance level before it can enter stronger bullish territory.
A successful breakout above this level could place the market in a more bullish phase, increasing the likelihood of a continued rally towards a new local high around $0.065 on the chart.
However, failure to break above resistance could trigger a further decline or force the asset to enter a consolidation phase around the current resistance zone.
Indicators Show Increased Probability of Rally
Moving Average Convergence Divergence (MACD), a technical indicator used to monitor price trends and market dynamics, is currently showing a clear bullish pattern.
The MACD formed a bullish golden cross pattern, which helped support STRK’s latest rally and suggests that bullish momentum remains strong.
Another important signal to watch out for is the formation of histogram bars. A continued expansion of the green bars of the histogram would indicate a higher probability that the rally could continue upward.
Likewise, the Chaikin Money Flow (CMF), which determines whether buying or selling pressure dominates the market, currently suggests that buyers are taking control.
At the time of writing, the CMF had turned positive, with a reading of around 0.12, indicating that buying volume had begun to exceed selling pressure, a development that generally supports higher prices.
On-Chain Capital Remains Low
Although STRK has seen strong performance in the current trading session, on-chain capital activity remains relatively low. Starknet’s total value locked has decreased by approximately $117.92 million since its peak on January 17, suggesting that cash outflows have continued over time.
The network’s TVL currently stands at approximately $205.47 million, representing a modest 1% increase over the past 24 hours.
Meanwhile, trading volume on the network’s decentralized exchanges continued to gradually improve, from around $3.15 million on May 2 to around $8.79 million at the time of writing, reinforcing expectations of a slow market recovery.
A sustained increase in on-chain capital inflows would remain a key factor for the broader market outlook and STRK’s long-term recovery prospects.
Final summary
- STRK saw strong upside, although key resistance levels remain a major obstacle to further gains.
- On-chain capital activity remains relatively low as total value locked (TVL) and decentralized exchange (DEX) trading volume remains low.
