SKY Crypto's 10% Rally Faces Challenges Amid $65M Buyback Wave

The price of SKY crypto experienced a significant rise of over 10% due to increased buybacks, trading volume, and staking activity. As the ecosystem evolves, questions arise about the sustainability of this surge and the implications of recent market movements.

Key Takeaways

The price of SKY has increased due to a wave of buybacks, enhanced trading volume, active staking, and shifts in market structure.
If the price remains above the recently broken trendline, there is potential for SKY to climb back to the $0.0620 mark.
SKY has indicated signs of recovery, reaching a market cap of $1 billion.
Over 84% of the ecosystem has upgraded to SKY, which includes a 10,000 MKR upgrade generating around $100K in fees over the past month.
In the last 24 hours, SKY saw its price rise by more than 10%, attributed to buyback initiatives and increased trading activity, with daily volume climbing by 78%, according to CoinMarketCap.

SKY up 10% but rejects at key level: Will the breakout hold?

Why is SKY’s Price Rising?

According to data from SKY Money, buybacks began increasing steadily in early November. As of now, the total buybacks have reached 1.395 billion tokens, valued at approximately $65.64 million, following an addition of 6.21 million tokens.

However, the pace of buybacks has slowed recently, with a decrease of 2,250 SKY tokens, even though the buyback process is only halfway through. Each transaction is averaging around $10,000, based on the latest data from SKY Money.

SKY Buyback Data

Source: SKY Money

Moreover, the altcoin has seen a rise in staking activities, which boosts network security. Approximately 35.94% (about $385.48 million) of SKY tokens are currently staked. According to DefiLlama, the daily trading volume increased by about $10 million, rising to $23.55 million—up 1.7% from the previous day's $13.44 million.

SKY Staking Activity

Source: DefiLlama

In addition, fees generated during the fourth quarter totalled $26.75 million, although this is less than the $45.3 million recorded in the previous quarter.

Will TVL Impact Price Growth?

SKY has managed to break above a descending trendline on the 4-hour charts and has confirmed this movement through a retest. This trendline had been active for the past two weeks, signaling seller dominance during that timeframe.

The seller activity has resurfaced on the charts, particularly after the price reached the $0.050 mark. As a result, both the Relative Strength Index (RSI) and Bull Bear Power (BBP) indicators showed a change in trajectory.

At the time of writing, the RSI indicated a rejection at the oversold level, while the BBP fell from 0.00625 to 0.00389, suggesting either buyer exhaustion or profit-taking following the recent price increase.

The price increase has raised investor sentiment, with hopes that SKY might have reached its lowest point, especially given the slight recoveries observed in the altcoin market over recent days. If the upward trend continues, there is potential for SKY to hit $0.0620 or even higher.

SKY Chart

Source: TradingView

Nonetheless, caution is warranted due to a recent Gravestone Doji pattern appearing, which typically indicates potential bearish reversals or pullbacks during bullish trends.

While optimism remains regarding further price advances, the Total Value Locked (TVL) within the ecosystem has been decreasing. Over the past month, TVL has fallen from $7.7 billion to $6.6 billion, posing a potential challenge to continued upward momentum.

Total Value Locked Data

Source: DappRadar

Metrics surrounding SKY present a mix of sentiments, though they are leaning more towards bullish. For this positive trend to be maintained, SKY’s price will need to consistently stay above the broken trendline.