- Even after millions of tokens flooded into exchanges, the price of STRK managed to avoid a significant drop.
- The indicator suggested that the value may fall due to lower trading volumes and increased volatility.
Two of the biggest stark networks [STRK] Holders may have risked a price drop, but the data suggests STRK is holding up well.
On May 25, AMBCrypto discovered via Spot On Chain that Tenoe, the liquidator for Three Arrows Capital (3AC), had deposited 2.18 million STRK with Binance.
How ETH ensured STRK’s freedom
Such large exchange deposits should precede a price drop, but Starknet tokens did not move.
At the time of writing, the cryptocurrency was priced at $1.25, up 4.06% in the past 24 hours.
Before Teneo's deposit, Ethereum [ETH] Co-founder Vitalik Buterin received an 845,000 STRK airdrop, worth $1.07 million, a move that caused the token's value to fall by 6%.
Source: Spot On Chain
However, Starknet did not seem to react in the same way, as the U.S. Securities and Exchange Commission approved an Ethereum spot ETF. ETH, including the native tokens of Layer 2 projects under its blockchain, skyrocketed before and after the approval.
For the uninitiated, Starknet is one of the notable Ethereum L2s.
Therefore, bullish sentiment around the ecosystem appears to be the main reason why STRK did not crash during the latest sell-off.
Where next: $1.06 or $1.50?
Additionally, AMBCrypto looked at the weighted sentiment around Starknet. At the time of writing, this metric had soared to 4.293. Weighted sentiment measures positive/negative comments about a cryptocurrency.
Therefore, this reading suggests that for every negative mention of STRK, there are four mentions supporting bullish reasons. If sentiment remains optimistic, the token's price is likely to continue to rise.
In a very bullish case, the value of STRK can reach $1.80. However, if it turns back to bearish conditions, STRK can rise to $1.06.
Source: Santiment
However, signals from trading volume suggest that bullish price predictions may be invalid. At the time of writing, STRK’s trading volume was $127.9 million.
This is a notable decrease from the figures on May 24. Trading volume can be a sign of interest in a token and market strength, therefore an increase in trading volume is considered a healthy indicator of price.
Therefore, the decline in Starknet trading volume while the price is rising suggests that the upward trend may not continue. If this prediction proves true, it could lead to a drop in the token’s price and a drop to $1.06 could materialize.
Meanwhile, volatility surrounding cryptocurrencies has increased, suggesting more pronounced price fluctuations.
However, Santiment said the figures indicate that the numbers may not be enough to spark the move that sent STRK above $1.50 a few weeks ago.
Source: Santiment
Whether this is realistic or not, the market capitalization of STRK in ETH terms is as follows:
Regardless of on-chain signals, market participants may want to keep an eye on ETH.
If predictions that ETH may hit new highs come true, STRK may move in the same direction. However, its beta may also struggle if altcoins fail to recover.
