Starknet’s token (STRK) has faced a significant decline of approxiately 20% over the past week. This drop comes as part of a downward trend in the price of $STRK since its inception. According to CoinMarketCap, the price of the Ethereum Layer-2 network token fell by around 50%, trading below $1.90, down from its peak of $3.66 on February 20. So, what’s behind this decline in the Starknet price? Let’s explore further to uncover the reasons.

Starknet Price Market Performance

Starknet Price Market Performance chart

Starknet is a decentralized network with a mission to offer scalable and secure computation for Ethereum applications, utilizing zero-knowledge proofs. STRK serves as the native token of Starknet, serving various purposes such as paying fees, staking, and participating in governance decisions.

Before we dive into the reasons behind STRK’s nosedive, let’s take a quick look at its current market performance. As of press time, Starknet is being traded at $1.83, with a 24-hour trading volume totaling $841,639,018, marking a decrease of 21%. Its market capitalization stands at 1.34 billion, positioning it as the 48th according to CoinMarketCap. STRK can be traded on major cryptocurrency exchanges such as Binance, OKX, KuCoin, Kraken, Bybit, HTX, and Uniswap.

Reasons for Drop in Starknet Price

Several factors are behind the STRK’s price drop:

1. Increased selling Activities

One significant factor contributing to the plummeting price of STRK is the behavior of airdrop recipients. Starknet distributed 780 million tokens, aiming to reward participation in the network and community. However, instead of holding onto their tokens, many recipients immediately offloaded them onto the market, creating substantial selling pressure.

The situation was further fueled by Nethermind’s mass sell-off, resulting in over a 50% reduction in the token’s value. Reports indicate that Nethermind liquidated 3.41 million STRK tokens, raking in a total of $6.7 million. Concerns loom over the potential for further sales, given the firm’s significant remaining hold of $12 million worth of tokens.

Airdrop hunters have also been consolidating their wallets, with notable instances of large token transfers to single addresses. Lookonchain, a reputable provider of on-chain data analytics, unveiled a massive airdrop event involving 1,432,800 STRK tokens distributed across 1,361 wallets. The merging of tokens into one wallet address indicates a joint effort by recipients to handle and potentially trade their assets.

The price of $STRK has been falling since its launch.

We noticed that #Nethermind has sold a total of 3.41M $STRK($6.74M) at $1.98 so far.#Nethermind still holds 6.74M $STRK($12.33M), and the selling may continue.https://t.co/EUvVeHvyCY pic.twitter.com/RiFFiZXQRt

— Lookonchain (@lookonchain) February 22, 2024

2. Controversy Surrounding Airdrop Distribution

Another reason is the controversy surrounding Starknet’s STRK airdrop distribution, which might have affected its price. The drop in value is probably due to the uproar over its 780 million token giveaway. The issue arose when it was revealed that the token was created in November 2022, but the original one-year vesting period was delayed until April of this year.

Questions have also surfaced regarding the fairness of the distribution process, with developers pointing out the creation of GitHub accounts waiting for the event. Starknet users who did not meet the November 15 snapshot criteria also voiced grievances over their exclusion from the airdrop.

The unfolding events have cast a shadow over the perceived fairness and transparency of Starknet’s distribution and reward mechanisms, prompting scrutiny from the community.

Stealth launch token onchain, count it as TGE and release token 2 years later but count that as vesting start date.

We see a lot of shit in token land, but that has to be one of the sketchiest moves yet.

— Adam Cochran (adamscochran.eth) (@adamscochran) February 14, 2024

Will STRK Price Recover?

Analysts suggest that Starknet’s ongoing development could potentially instill a sense of optimism surrounding STRK. In such a scenario, the token can overcome various psychological barriers and witness long-term growth. There’s anticipation that, in a bullish market, it might effortlessly surpass the $5 threshold. Despite potential impacts from events like the Bitcoin halving, STRK is projected to maintain a price level above its 2024 benchmark.

Considering the broader market dynamics, experts speculate that the Bitcoin halving event could have significant repercussions on the cryptocurrency landscape. Like many other alternative coins, Starknet is anticipated to see an upward trend in 2025, establishing new levels of resistance. If confidence among buyers remains strong, it’s anticipated that it could surpass the $9 mark in the coming years.

Looking ahead, projections indicate that by the conclusion of 2026, STRK could surpass the $11 resistance level following any necessary price adjustments. Therefore, some analysts suggest that by 2030, it might reach a trading value of $26.

At the press time, STRK has slightly increased by 1.40%, trading at $1.82.

Conclusion

Starknet’s recent price decline reflects many factors, including increased selling activities and controversies surrounding distribution fairness. As a newcomer to the market, Starknet faces uncertainties about its future course.

While analysts express optimism for a potential recovery, the path forward remains uncertain. Starknet’s ongoing development efforts and the broader market dynamics may influence its price performance in the long term.

 

The post Why Starknet Price Falling? Will STRK Recover? appeared first on CoinGape.

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Filed under: News - @ January 1, 1970 12:00 am