Key Takeaways
What triggered STRK’s recent 19% rebound despite a bearish market?
Strong spot and derivative inflows totaling over $46 million fueled the rebound, led by long positions.
What key resistance level could challenge STRK’s bullish momentum?
The $0.177 zone, which previously caused sharp declines, may act as a barrier to further gains.
Starknet [STRK] layer-2 cryptocurrency has made a sharp rebound following a market-wide liquidation that forced investors out of the market and caused $669 million in losses.
The quick rebound followed major liquidity channelled towards STRK from investors; however, revelations show that these investors’ positions remain questionable based on the obstacle.
Decisive buys pull STRK upward
STRK’s recent 19% surge was driven by a decisive wave of bullish investor activity, with many adding the asset to their portfolios despite broader market weakness.
In the 48 hours, investors spent $3.8 million on STRK, a bold move in a typically bearish environment.
For the week, spot investors have accumulated $6.89 million worth of STRK, reversing last week’s $2.8 million sell-off, the first weekly net sale since Q1 of this year.
Source: CoinGlass
Although the spot liquidity addition played a huge role, there has been a significant inflow from the derivative market likewise, with new contract positions added collectively valued at $39.8 million in the past day.
The positive reading of the Weighted Funding Rate combined with the Open Interest, confirms that the majority of this flow comes from long contracts; in fact, buying volume leads the sell volume in the market.
While the market shows a positive price outlook, the bullishness has come into question with the resistance level surfacing on the chart, which could potentially lead to a price reversal.
A traffic red could be ahead
Analyzing the chart pattern shows that STRK has now traded into a key resistance zone at $0.177 on the chart, which could ultimately hinder the price from making a rally.
The most recent occurred on the 6th of October, causing an 84% drop, followed by another on the 10th of November that led to a 37% decline.
Source: TradingView
If history repeats, STRK could slide even lower, losing anywhere up to 46%, the average losses from the sell-offs.
On the more positive side, using the curve line, STRK formed what appears similar to the well-known inverted triangle known to precede a broader market rally, in this case, an STRK rally.
Notably, this remains a stretch, given experience with how price rallies into this marked resistance zone on the chart.
Signs of a positive outcome?
Technical indicators show that there’s a likelihood that the recent rally into this zone defies the sell-off notable at the resistance zone, as both indicators show bullish signs.
At press time, the MACD showed that the blue line and the signal line are both trending to the upside on the chart, suggesting that the momentum is in favor of buyers and that STRK has a chance of continuing in its current path.
Source: TradingView
More alluring is the fact that the Money Flow Index (MFI) continued to trend upward in the positive region, implying that there’s more capital inflow into STRK, adding to the overall bullish outlook and a tendency that STRK continues to surge.
Overall, the bullish tendency for STRK to continue forward remains, and there’s a high chance that the asset makes a positive rebound.
