The sizable price surge that Starknet has recorded this past week contributed significantly to growth in activity in the derivatives market.
A recent price gain has pushed Ethereum Layer 2 (L2) protocol Starknet (STRK) into the top 100 cryptocurrencies by market capitalization. Within the last seven days, the token has registered up to a 10% surge in its price. As of press time, STRK is up by 6.63% and currently trading at $0.6111. Furthermore, its trading volume almost doubled in value.
Bullish Metrics Surge for Starknet
STRK saw a 44.34% jump in its trading volume in a matter of 24 hours. Consequently, the crypto’s market cap shot up by 6.63%. With a market cap value of $892,343,659, STRK now ranks as the 73rd largest cryptocurrency by market cap. This measures the total value of STRK in circulation, proof of growth in this metric.
On one hand, it is a metric that suggests an upcoming price rally and reflects increasing demand for the token. The sizable price surge that Starknet has recorded this past week contributed significantly to growth in activity in the derivatives market. This momentum can be seen in its increasing the futures open interest which has grown to about $51 million.
Noteworthy, the futures open interest of an asset is equal to the total number of outstanding futures contracts that are yet to settle. A spike in this metric is an indication of more traders’ push into new positions. In the last 7 days, the token’s open interest has seen a 9% increase. Even with this rise, several STRK traders do not think the token can sustain the price rally.
As a result, they are more interested in entering short positions than long positions. This sentiment was judged based on the readings from STRK’s funding rate. During the time of the review, this has been predominantly negative, confirming that traders who bet on the token come with the expectation that the price will drop compared to those buying for a rally.
An Extended STRK Price Rally or Decline?
Meanwhile, some STRK key technical indicators on a one-day chart suggest that the price rally may be extended.
The token’s Chaikin Money Flow (CMF) is surging along with Starknet price. This shows that the current price rally is backed by tangible demand for the crypto asset. Additionally, STRK’s Accumulation/Distribution (A/D) line has also followed an uptrend, further confirming a strong buying pressure.
Should this continue, STRK is likely to hit $0.63 or even more in the coming weeks. On the flip side, the token could head to the $0.5 level.
Markedly, this price rally is not peculiar to STRK but most of the Ethereum L2s. In the past week, L2 tokens recorded a significant surge in their value. Optimism (OP) and Arbitrum (ARB) saw a double-digit price surge of 26% and 16% respectively.
This is an applaudable recovery for Arbitrum considering that it earlier showed weak price performance in addition to other dwindling metrics.
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