SKY Crypto Surges with $94 Million TVL Boost – Is a Pullback Ahead?

The total value locked (TVL) has surged by $94 million, alongside $3.61 million in rewards, reflecting strong investor confidence and optimism.
The Long-to-Short Ratio is rising, and Open Interest has increased, indicating a bullish outlook despite a potential short-term pullback.
Sky [SKY] has become a preferred choice for on-chain investors as the overall cryptocurrency market capitalization reaches the $3.5 trillion mark.
Recent liquidity inflows have driven SKY’s price up by 7% in just 24 hours, suggesting further recovery could be on the horizon.

Key Takeaways

The total value locked (TVL) has surged by $94 million, alongside $3.61 million in rewards, reflecting strong investor confidence and optimism.
The Long-to-Short Ratio is rising, and Open Interest has increased, indicating a bullish outlook despite a potential short-term pullback.
Sky [SKY] has become a preferred choice for on-chain investors as the overall cryptocurrency market capitalization reaches the $3.5 trillion mark.
Recent liquidity inflows have driven SKY’s price up by 7% in just 24 hours, suggesting further recovery could be on the horizon.

SKY eyes new highs as $94M inflow boosts investor confidence

Investors Boost Their Positions

Investors are increasing their exposure as the TVL sees significant growth. Between November 12 and today, a remarkable $94 million inflow of SKY tokens has been recorded, with investors contributing their assets to liquidity pools.

These pools not only provide rewards for deposited funds but also signal a sharp rise in TVL, which often reflects investor faith in a potential price rally. This enables participants to benefit from both price increases and additional rewards.

SKY TVL and price chart. Source: DeFiLlama

During the same timeframe, investors have racked up $3.61 million in paid incentives. Additionally, a similar trend is evident off-chain on centralized exchanges, where spot investors are acquiring more SKY. However, the current buying momentum has slightly slowed, with only $258,000 in SKY bought recently.

Increased Liquidity in Derivatives

The derivatives market is also witnessing a significant rise in liquidity. According to data from CoinGlass, Open Interest (OI) has climbed to $20.46 million, an increase of $4 million. While a liquidity rise alone doesn't signify a bullish trend, perpetual trading figures indicate greater buying volumes compared to selling.

The Long-to-Short Ratio remains above the neutral point of 1, currently standing at 1.046, signaling a dominance of long positions.

SKY trading volume. Source: CoinGlass

The OI-Weighted Funding Rate and associated metrics suggest that a majority of the available liquidity is being driven by long traders who are paying funding fees to maintain parity between the spot and perpetual markets.

Short-Term Pullback Before Broader Rally

Analysis of the liquidation heatmap indicates that SKY may face a temporary decline prior to a larger upward movement. The heatmap displays clusters of liquidity beneath the current price, represented in various shades of green. These areas often act as price magnets and demand zones.

A drop to these price levels could trigger fresh buying activity, leading to a possible rebound. If momentum builds from this level, SKY could potentially recover to its October 14 high of $0.065.

SKY liquidation heatmap Source: CoinGlass

In summary, overall market sentiment for SKY remains exceedingly bullish, and a new price peak appears likely in the near future.