Ethereum Layer-2 Network Starknet Back Online Following Outage

💡 DMK Insight

Starknet’s four-hour downtime is a red flag for Ethereum’s scalability narrative. This incident highlights the vulnerabilities still present in layer-2 solutions, which could shake investor confidence. Traders should be wary of potential sell-offs in ETH, especially if this downtime raises concerns about network reliability. If ETH starts to dip below $3,200, it could trigger further bearish sentiment, leading to a test of support levels around $3,100. Keep an eye on trading volumes; a spike could indicate panic selling or opportunistic buying. On the flip side, if Starknet addresses this issue swiftly and effectively, it could restore some confidence, but the immediate impact on ETH’s price action is likely to be negative. Watch for any updates from Starknet and how the broader market reacts, especially with ETH’s correlation to other layer-2 projects like Optimism and Arbitrum, which might also feel the heat from this incident.