SPS Price Update 12/6/2021

Fear and uncertainty has begun to grip the crypto markets this week as yet another massive liquidation event happened across the boards. There is a general sense of unease throughout the plane, not just in crypto but in all markets. Bitcoin is struggling to regain some of the ground it has lost over the last month and will continue to face some selling pressure as the holiday season drags on and people cash out for their shopping, taxes and travel plans (or Lambos).

Many are taking profits from the incredible run-up in crypto, especially on Hive! Power-downs have begun all around and the price is surely reflecting this. At the time of writing, Hive is sitting just about $1.44, down over 58% from the insane peaks near $3.50 only 11 days ago. Splintershards and Dark Energy Crystals were not spared in this volatility as both prices have shrunken back to levels not seen since October. SPS trading in the low 30s and DEC just dipped below 0.8 cents.

Part of the factor behind the recent SPS dip was the release of more private sale tokens to holders this week who immediately sold, as they usually do. An already weakened market was pushed towards breaking support levels and is now looking dangerously close to dropping even further. On the chart above I have indicated some key areas to pay attention to:

1. Prior support zone drawn in red, we could fall down to the 20 cent ranges before major buyer interest picks up again- due to greater market sentiment shifting and buyers becoming more defensive.
2. MACD strategy short entry was approximately 3 days ago showing we have just entered into a bearish trend.
3. RSI has not bottomed out yet. Rather close to a support zone being established soon.

What does this mean? For starters the crypto markets have shifted towards a more bearish tone with a lot of uncertainty. This means less buyers going full force especially if they have their money spread out elsewhere. SPS token staking for VOUCHER resumes this week so this could have a positive effect on the price as buyers snatch up cheaper SPS purely for this. Once more is known about the future governance implementation of SPS there will be more demand of course.

Generally I am still very bullish on Splinterlands and the whole ecosystem but it is not going to be spared from the crypto massacre we are all experiencing. More cautious investors have been shoring up their risk for months while the more emotional ones are taking those steps now to protect what profits they have left. It is important to always keep an eye on the bigger picture and to also assess the tokenomics from time to time.

The supply is constantly being inflated by the airdrop, private sale distribution, staking and so on for a total of seven different distribution points. Should the buyer demand tail off we could see a sustained bear market for SPS tokens in the future as the max supply is going to be 7.8x greater than the current circulating supply. The total length of time it will take to hit that max is over 5 years so I'm not overly concerned just yet, but it is certainly something to consider going forward.

I personally think that SPS prices will bottom out over the next several weeks as it continues to face sustained selling pressure daily. Until that price becomes attractive enough to give a hefty return then it will keep falling. At about 20 cents you are looking at a 5% ROI for every penny it moves back up so this is an incredibly attractive price range to buyers, whereas at 30 cents every penny is only 3.33% ROI.

This drop in SPS price will also affect the DEC prices as the airdrop APR declines with dollar values. Conversely it can also work in favor as the prices should begin to rise together once the market begins to clear up.

My personal strategy right now is: waiting patiently for the Chaos Legion packs to go on general sale for $4 late January- early February time... meanwhile take advantage of the airdrops on SPS by holding DEC.

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I am not a financial advisor and this is not financial advice. This information is for educational and entertainment purposes only.

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