Markets
Starknet (STRK) Climbs Market Cap Rankings on Rising Prices
Last week, the value of Layer 2 (L2) tokens increased significantly. Top assets such as Optimism (OP) and Arbitration (ARB) has seen double-digit price increases. Still rising at the time of going to press, their values have increased by 29% and 16% respectively over the past seven days.
The rally also extended to Starknet (STRK), another L2 token, which saw its price increase by 10%. during the same period.
Starknet is now in the top 100 coins
The increase in trading activity and price of Starknet (STRK) during the reporting period resulted in an increase in its market capitalization.
At the time of writing, the altcoin’s market cap stands at $905 million, its highest level in the last seven days. It is now the 71st crypto asset with the highest market cap.
Starknet Market Capitalization. Source: Santiment
The market cap of an asset measures the total value of its tokens/coins in circulation. When it spikes, the total value of these tokens increases. This is a positive sign that highlights a rise in price and increased demand for an asset.
The rise in STRK’s price over the past week has led to increased activity in its derivatives market. This can be inferred from its rise future Open Interest. At $51 million at the time of writing, the token’s futures open interest has increased by 9% in the past week.
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Open interest on an asset’s futures contracts refers to the total number of outstanding futures contracts that have not been settled. When it spikes, it means more traders are taking new positions.
However, many derivatives traders are not convinced that STRK the current recovery is sustainable. This prompted them to demand more short positions. This is based on readings of the token’s funding rate, which was mostly negative during the reporting period.
Funding rates are a mechanism used in perpetual futures contracts to ensure that the contract price of an asset remains close to its spot price. When they are negative, it means that more traders are buying the asset expecting a price decline than those buying and hoping for a price rise.
STRK Price Prediction: Rally to Continue
On a daily chart, some of STRK’s key technical indicators are hinting at the possibility of an extended upside move. For example, its Chaikin Money Flow (CMF) has been trending higher along with its price.
This indicator measures the flow of money in and out of an asset. When it increases, it means that liquidity is being provided to the market. When the price of an asset and the CMF tend to increase, it is a positive sign that shows that the price increase is supported by real demand for the asset.
Additionally, STRK’s Accumulation/Distribution (A/D) curve is trending upward at press time. This indicator measures the cumulative flow of money into and out of an asset.
As with STRK, when both price and the A/D line move higher, it confirms a strong uptrend, suggesting that buying pressure is strong.
If this buying pressure persists, the token price could surge to $0.63.
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However, if profit-taking activity begins, STRK price could fall to the price level of $0.5.
Disclaimer
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