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SPS has finally broke out of the falling wedge
The falling wedge has been with SPS ever since it was first traded. It has actually broken out of it several times before. This was in spring and summer of last year as you can read here in last year's post. When it did, it always broadened the wedge and left more room for SPS to continue trading in it. This is why we have actually never truly broken out of it. So this is the caveat for this post: maybe it is again a "fake out" lasting several months before continuing its downward movement. But there are at least 3 very good reasons against that:
- As mentioned in this week's post, the bear market has ended.
- SPS could never have really fallen under 2 cents since there is simply too much value in the whole ecosystem. In other words, the market would not have let people simply buy 100ks of SPS almost for "free" since this would have increased the value of SPS. If we have a hard bottom, price cannot continue falling, at least within this wedge.
- LAND and other games are coming to Splinterlands very soon which will no doubt bring in more value and users for the #1 Blockchain game
Last month, I made a post called "SPS on the verge of a breakout" which is now seemingly confirmed. The only thing that was a surprise, was that price fell back to about 2.2 cents - but importantly, it did not make a lower low. This was the chart:
And here is the updated chart:
You can see the breakout from the falling wedge very nicely. Again, it is not a definitive trend change, but as far as we do not make a lower low SPS should establish an upward trend. For this reason you can see a green channel in which SPS should be moving in the coming months and even years.
You can also see the upcoming additions to the SPL universe. This should all help the game and translate to a higher SPS price. Expect this broad channel to get more defined in the coming months when we have more data. There are, for example, several resistances (in orange) coming up:
Keep in mind that the price increases are in absolute terms very small: the 10 cents is still a long way up as you can see here:
In this chart you can see how much SPS still has to climb to reach 10 cents (which is still a 90%(!) correction from its ATH). You can also see a possible path outline as well as a new green supporting trend line which can hopefully be established similarly to this. Even with the steeper slope of this green line its support would be only at 10 cents at then end of 2023.
Conlclusion
SPS should make a sustained trend change. But the recovery to former highs will take a very long time since the inflation for SPS is still extremely high. This will only change once DEC reached its peg and players will have to burn SPS in order to receive DEC to spend on LAND etc.
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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