The broader cryptocurrency market is currently experiencing fresh downside volatility, with Ethereum (ETH) falling back below the $3,000 mark after reaching a 24-hour high of $3,167. Despite this shaky market environment, several altcoins are demonstrating strong upward momentum, and Starknet (STRK) is notably among the top performers today.
STRK has seen an impressive 16% increase in the past 24 hours, extending its monthly rally to a substantial 85%. This surge is occurring at a time when most of the market is experiencing pullbacks, drawing significant attention from traders seeking strength during periods of uncertainty. However, despite the ongoing rally, the lower-timeframe chart is hinting at a pattern that could influence the token’s next significant price movement.
Bearish Butterfly Harmonic Pattern in Play?
On the 4-hour timeframe, STRK appears to be developing a potential bearish butterfly harmonic pattern. This formation is recognized for its tendency to drive prices higher during the CD leg before reaching its completion zone, known as the Potential Reversal Zone (PRZ).
The early structure of this pattern commenced with Point X forming near $0.244976, followed by a sharp decline to Point A at $0.169772. Subsequently, STRK experienced a strong bounce, reaching Point B at today's high of $0.22.
The price has since experienced a slight dip below that level, currently trading around $0.2164. This suggests that the BC leg of the pattern may be in the process of forming.
Future Outlook for STRK
If the bearish butterfly pattern continues to materialize, STRK could potentially retest the 0.886 Fibonacci retracement level. Within this area, a potential Point C might form near $0.176800, indicating a decline of approximately 17% from current price levels. While a price drop might initially seem unfavorable, this zone is often where harmonic patterns tend to trigger strong bullish reactions, setting the stage for a significant rally in the CD leg.
It is important to note that the pattern is still in its early stages and cannot be definitively confirmed until price action develops around the anticipated Point C area. Traders closely monitoring STRK should pay careful attention to how the token behaves as it approaches these deeper support levels. A strong influx of buyers stepping in at the projected zone could signal the commencement of the next substantial upside wave.
Despite the unconfirmed technical structure, STRK's overall trend remains robust. Coupled with its current breakout momentum, a controlled pullback could potentially strengthen the subsequent leg of the rally, particularly if the broader market shows signs of stabilization.