Starknet [STRK] has faced a difficult past year, with the asset recording multiple lows and declining by nearly 59% over the period.
However, the recent decline has shown signs of reversal, as the token rallied by 13% during the current trading session, with market indicators pointing to 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 following the breakout formation.
The cup-and-handle pattern is widely regarded as a classic bullish continuation structure that often develops ahead of 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 move into a 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 toward a new local high around $0.065 on the chart.
However, failure to break above the resistance could trigger another decline or force the asset into a consolidation phase around the current resistance zone.
Indicators show heightened rally probability
The Moving Average Convergence Divergence (MACD), a technical indicator used to monitor price trends and market momentum, currently shows a clear bullish setup.
The MACD has formed a bullish golden cross pattern, which helped support STRK’s latest rally and suggests that bullish momentum remains strong.
Another important signal to monitor is the formation of the histogram bars. A continued expansion of the green histogram bars would indicate a stronger probability that the rally could continue upward.
Likewise, the Chaikin Money Flow (CMF), which tracks whether buying or selling pressure dominates the market, currently suggests that buyers are gaining 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 outweigh selling pressure, a development that generally supports higher price movement.
On-chain capital remains weak
Although STRK has performed strongly during the current trading session, on-chain capital activity remains relatively weak. Starknet’s total value locked has declined by roughly $117.92 million since its peak on the 17th of January, suggesting that liquidity outflows have continued over time.
The network’s TVL currently stands at around $205.47 million, representing a modest 1% increase over the past 24 hours.
Meanwhile, trading volume across decentralized exchanges on the network has continued to improve gradually, rising from roughly $3.15 million on the 2nd of May to about $8.79 million at the time of writing, adding to expectations of a slow market recovery.
A sustained increase in on-chain capital inflows would remain a key factor for STRK’s broader market outlook and long-term recovery prospects.
Final Summary
- STRK recorded a sharp upswing, although key resistance levels remain a major obstacle to further gains.
- On-chain capital activity remains relatively weak, as both total value locked (TVL) and decentralized exchange (DEX) trading volume continue to stay low.