Crypto Analysis | SPS Broke Second Resistance - All Good?

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SPS broke the second resistance I was talking about, which is bullish

But... is SPS set for a parabolic run now? I have become much less enthusiastic with SPS over the months I have been covering it. If you go back to my posts you will see that I expected SPS to perform a lot better than what we saw. I realized that this was a mistake on my part; I didn't really look at the white paper. At the beginning I naively assumed that it was at around 300 Million. Then I released with inflation it was probably going to be around 1 Billion. Stupid me :) It would have been so much easier to just check the whitepaper where the distribution is all laid out. There is going to be 3 Billion. Ups!

3 Billion is a lot. And it would mean that at $1 SPS would have a market cap of 3 Billion eventually. You can see that we are not there yet. Currently, The Supply is at around 666 Million with it scheduled to be at around 1 Billion at around 10 months. The 3 Billion supply will only be reached in over 4 and a half years from now. A continual inflation like this makes sense as there should be a lot of distribution from playing the game. But 3 Billion is still quite a big chunk; not sure why the team set it this high.

The inflation is not linear as you can see. Instead, it is hyper-inflationary for the first 12 months, the supply then actually decreases. If we draw a straight line in the chart we get about 500 Million of added supply every year or 1,3 Million per day. This gives us a linear inflation of about 0.17% per day or about 62% per year. So... this is why there is so much selling pressure. I knew it was high, but this high...

A key date will obviously be the end of the airdrop. From then on the inflation gets reduced by a lot: it will be reduced by 600 Million. This will no doubt have an impact on the price of SPS. Also, the riftwatchers cards will only be purchasable by SPS. At current price levels this equates to about 140 Million (not sure if this will be burned; anybody know?)

So with this background let's have another look at the price chart. In the last post I presented this chart:

I argued that we are seeing a fractal repeat (the dotted wedges) which will be followed by a breakout to the top. Breaking through the dotted trend line is what I meant when I said waiting for the second breakout. This is basically it. If it happens price should move much higher.

And we just got that confirmation. Price has broken through this strong resistance and has remained above it. However, with the inflation still being super high over the next months I am proposing a less bullish chart. Here you see the ending of the private sale as well as the airdrop which I think will have an upward pressure on price.

This would have us at around 20-30 cents at in summer of this year. Not very dramatic, but I think more realistic. On the other hand there is of course always potential for news events. We just had the announcement by the team that SPS will be listed on the first CEX: Crypto.com! This is very bullish news and it could impact the price stronger than I am expecting.

 

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