Crypto Analysis | SPS Holding at Critical Support!
Good day Hiveians!
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UPDATE: I forgot about the GLX airdrop which will start on this Tuesday which will definitely impact SPS price positively. However, since it is a 1 year airdrop, I don't expect price to increase tremendoulsy. More on this in the next SPS post!
It's been hard for all SPS investors to see the value in terms of $ decline so heavily from $1. But as I pointed out in some of the previous posts this was mainly due to the large inflation we saw (and still have, albeit reduced). Over 1 million SPS a day inflation has to lead to a downward spiraling price action. But since the end of the airdrops SPS is being distributed at a reduced rate which lead to the trend change signal we saw in the chart: for the first time SPS made a higher low which established an upward price channel (seen in green):
Since then we have some more data. The upward price movement continued, but could not breach the critical 10 cents area. However, importantly we saw a higher high. Since then price has declined again and is now holding at critical support.
Holding ~6 cents is going to be big for SPS: if it fails 5 cents has to hold otherwise there is a high chance that price will make a lower low which would be extremely bearish. The horizontal resistances (in blue) coming from the past movement have been too challenging for SPS to overcome. If price can stay in this green channel we could continue in it for quite some time:
The price potentials in this channel are decent with about a 60% price gain and a 30% decline. There is also the chance of a higher break out to the thin green line which, however, seems too bullish.
It is clear that SPS is not a token that "will make one rich fast". The still high inflation and the low burn rate (with about half of it being staked), will very likely not lead to massive price implosions anytime soon. The supply will probably reach almost 1 billion at the end of the year which would already put the market cap at 100 million with only 10 cents.
The two biggest developments currently which could have bigger impacts I believe are LAND and the new TD game. Both of them are scheduled to be released at around Q1 in 2023. The team has also said that they have some bigger partnership announcements coming up... in the most bullish case I could see something like this:
I don't see the price going lower than ~4 cents as there is simply too much value here (big community, biggest blockchain game, good team, new releases etc.!). The challenge for the team will be to introduce more utility for SPS and burn mechanics. Will we see $1 again? I don't think anytime soon, but the team is having a long term vision, so we might just have to wait a couple of years... Will you be able to hold that long?
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!