Starknet Token (STRK) Faces Significant Decline: What’s Behind It?
The price of Starknet’s token (STRK) has experienced a notable drop of around 20% over the past week. This decline is part of a downward trend in the price of STRK since its launch. CoinMarketCap reports that the price of STRK has fallen by approximately 50%, trading below $1.90 from its peak of $3.66 on February 20. So, what are the reasons behind this decline in the Starknet price? Let’s delve deeper to uncover the factors at play.
Starknet Price Market Performance
Starknet is a decentralized network that aims to provide scalable and secure computation for Ethereum applications using zero-knowledge proofs. STRK serves as the native token of Starknet, used for various purposes such as paying fees, staking, and participating in governance decisions.
Before we explore the reasons behind STRK’s decline, let’s take a look at its current market performance. At present, Starknet is being traded at $1.83 with a 24-hour trading volume of $841,639,018, marking a decrease of 21%. Its market capitalization stands at $1.34 billion, positioning it as the 48th largest cryptocurrency according to CoinMarketCap. STRK can be traded on major exchanges such as Binance, OKX, KuCoin, Kraken, Bybit, HTX, and Uniswap.
Reasons for the Drop in Starknet Price
There are several factors contributing to the decline in STRK’s price:
1. Increased Selling Activities
One significant factor behind the plummeting price of STRK is the behavior of airdrop recipients. Starknet distributed 780 million tokens as a reward for participation in the network and community. However, instead of holding onto their tokens, many recipients immediately sold them on the market, creating substantial selling pressure.
The situation was further exacerbated 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, earning a total of $6.7 million. There are concerns about potential further sales as Nethermind still holds $12 million worth of tokens.
Airdrop hunters have also been consolidating their wallets, with large token transfers to single addresses. Lookonchain, a provider of on-chain data analytics, revealed a massive airdrop event involving 1,432,800 STRK tokens distributed across 1,361 wallets. The consolidation of tokens into one wallet address suggests a collective effort by recipients to manage and potentially trade their assets.
2. Controversy Surrounding Airdrop Distribution
Another reason for the decline is the controversy surrounding Starknet’s STRK airdrop distribution, which may have impacted its price. The drop in value is likely due to the uproar over the 780 million token giveaway. 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 been raised about the fairness of the distribution process, with developers pointing out the creation of GitHub accounts specifically for the event. Starknet users who did not meet the November 15 snapshot criteria have expressed grievances over their exclusion from the airdrop.
These unfolding events have cast doubts on the perceived fairness and transparency of Starknet’s distribution and reward mechanisms, leading to scrutiny from the community.
Will STRK Price Recover?
Analysts suggest that Starknet’s ongoing development efforts could potentially instill optimism regarding STRK’s future. In such a scenario, the token may overcome psychological barriers and experience long-term growth. There is anticipation that, in a bullish market, it could easily surpass the $5 threshold. Despite potential impacts from events like the Bitcoin halving, STRK is expected to maintain a price level above its 2024 benchmark.
Considering broader market dynamics, experts speculate that the Bitcoin halving event could have significant repercussions on the cryptocurrency landscape. Like many other altcoins, Starknet is expected to see an upward trend in 2025, establishing new levels of resistance. If buyer confidence remains strong, it is anticipated that STRK could surpass the $9 mark in the coming years.
Looking ahead, projections indicate that by the end of 2026, STRK could surpass the $11 resistance level after any necessary price adjustments. Therefore, some analysts suggest that by 2030, it could reach a trading value of $26.
At present, STRK has slightly increased by 1.40%, trading at $1.82.
Conclusion
The recent decline in Starknet’s price reflects various factors, including increased selling activities and controversies surrounding distribution fairness. As a newcomer to the market, Starknet faces uncertainties about its future trajectory.
While analysts express optimism for a potential recovery, the path forward remains uncertain. Starknet’s ongoing development efforts and the broader market dynamics will likely influence its price performance in the long term.
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