Crypto Analysis | SPS Breakout!

 

I hope this didn't catch you by surprise

It was a long time coming and my past coverage was all aimed at this next breakout in price. This has now happened at least 3 or 4 times in the last 2 years and the real test will be if SPS can manage to actually stay on an upward trajectory. So far price has always made a new lower low after several months. But we have analyzed the reasons for that quite exhaustively in the last couple of posts. So why is this time different? Here is a recap of the main reasons:

• SPS has more utility: it now needs to be staked to earn good returns for playing the game. There is also a rental market in place.
• DEC is about to has PEGed: Dec hitting its peg signals that the supply of DEC is getting less. Once it's used up (burned or staked), the only way to get DEC is through burning SPS (hence the flywheel).
• Rebellion has launched and has been a massive success, signalling that the game is alive and well
• LAND 1.5 is almost here; This will (a) eat up a lot of DEC (perhaps all of the supply) and (b) it will require players to use SPL assets to receive SPS making it more difficult to receive and more valuable as such
• SOULKEEP: While the launch is still away for some more months (probably Q1 2024), it will no doubt shake things up. This will be a whole new game that could perhaps attract more players than the Rebellion expansion

The writing has quite literally been on the wall for anyone to see. Personally, I used these last few months to buy as much SPS as possible, and it seems that is about to pay off. Again, the caveat is that we do not know how sustainable this price development will be. We will see when price heads lower again - it then has to make a higher low for price to reach higher highs.

TA

In the chart we can see the falling wedge, a significant uptick in volume (while price has been declining) as well as the breakout from the upper boundary of the wedge. It's clear now that SPS has momentum to go significantly higher. The question, again, is how far can it go before running out of steam, and can it establish a good support/ascending channel?

An interesting picture emerges when we take the end of 2025 as the focal point of when we could expect the bull cycle to top out. We can then draw trend lines that would guide us to a desired price level. Not that it has to ever reach that target, but it does show on what trajectory SPS would have to be on in order to reach that in around 2 years.

We can see here the trend lines signalling a trajectory from 10 cents to 5 dollars. In between are the levels of 50 cents, 1 dollar and 2 dollars. I think it could be interesting to keep these lines in the chart for the coming months and years to see on which path SPS could be on. Not that this would be very exact, since big price swings can and will happen. Yet if we e.g. happen to stay well under the 10 cents trajectory it will be increasingly difficult to imagine a $5 scenario. As mentioned in a previous post, I think $1 is quite possible for SPS. I guess we'll just have to wait and see for now.

 

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As a general reminder: Please keep in mind that none of this is official investment advice! Crypto trading entails a great deal of risk; never spend money that you can't afford to lose!

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