STRK, the native token of the ZK-Rollup platform Starknet, has witnessed a decline in its value in the past week due to falling buying pressure, which has persisted over the past few weeks.
If the current bearish trend continues, the Layer 2 (L2) token could potentially breach its all-time low, which it recently fell to.
Starknet May Drop Below Its All-Time Low
On July 5, STRK plummeted to an all-time low of $0.46. While its value has since rallied by 14%, the L2 token remains at risk of shedding these gains and falling below the $0.40 price level.
This is due to the steady rise in the altcoin’s selling pressure. As of this writing, STRK’s Relative Strength Index (RSI) is in a downtrend and far from its 50-neutral line at 36.77.
An asset’s RSI measures the speed and change of its price movements. It ranges between 0 to 100 and is used to identify overbought or oversold conditions in a market.
At 36.77, STRK’s RSI suggests that market participants have favored selling over buying, putting downward pressure on its price.
This level is close to the oversold threshold of 30, which indicates that the asset might be undervalued and could see a price increase if buying interest picks up. However, the negative sentiment that currently trails STRK may be impossible in the near term. At press time, STRK’s weighted sentiment is -0.29.
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An asset’s weighted sentiment metric tracks the overall mood of the market regarding it. When the value of an asset’s weighted sentiment is below zero, most social media discussions are fueled by negative emotions like fear, uncertainty, and doubt. It is often interpreted as a precursor to a price decline or a confirmation of a downtrend.
STRK Price Prediction: Bearish Sentiments Flourish in Derivatives Market
The bearish sentiment trailing STRK can be gleaned from the many short positions opened in the 24 hours. According to Coinglass, the token’s funding rate is -0.01% at press time.
When an asset’s funding rate is negative, it reflects bearish sentiments. This means there are more traders who expect the asset’s price to fall than those who buy the asset hoping to sell it for profit.
If the bearish sentiments persist and selling pressure continues to increase, STRK may fall to a low of $0.19, a price level it last reached in January.
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However, if sentiments shift from bearish to bullish, the token’s price may rise above $2.
Disclaimer
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