Sky (SKY) is up 11% over the past day, extending a period of stable performance for the protocol.
At press time, usage of the protocol was high, generating $987,000 in fees over the past 24 hours, while volume peaked at $13.49 million over the same window.
Token volume also saw an upward trend, increasing by 5.78% to $23.25 million. Together, the price and volume gains indicate strengthening performance, and several signals suggest that SKY could extend its move.
Can SKY climb back towards $0.67?
SKY could rise to around $0.067, a level the token last reached in early June. The outlook is based on a recent chart formation, with SKY drawing an inverse head and shoulders pattern.
An inverse head and shoulders pattern usually forms before a stronger upward move. The structure is still developing, but a clear break above the $0.050 neckline would open the door to a much broader rally.
If the upward momentum continues, SKY would show an increase of 13.79% compared to its June target, a development which is in the short term.
In the short term, the price could consolidate halfway before reaching this final target. To achieve this, SKY would recover all losses accumulated since June.
Momentum Indicators Strengthen SKY’s Case for Further Upside Potential
Many momentum indicators have converged, suggesting that SKY could continue to extend its gains.
At the time of writing, the Money Flow Index, which tracks the movement of capital into and out of an asset, showed increasing inflow into the market.
The IMF moved higher and crossed the 50 mark. A reading above 50 signals that traders have entered a bullish phase, increasing the chances of more capital flowing in in the coming sessions.
The Moving Average Convergence Divergence (MACD) has regained strength, printing a green histogram bar after several days of slowdown.
The key test comes when SKY approaches the neckline, where selling pressure typically intensifies. For the bullish scenario to hold, the MACD would need to move into positive territory while the MFI remains below 80, a combination that would keep the rally sustainable.
Holder income provides more incentive to lock tokens
Traders now have more incentive to keep their assets locked in the protocol’s TVL, due to the revenue paid to SKY holders. According to DeFiLlama, these revenues have reached $301,000 since the beginning of July, approximately 30% of the $1.1 million distributed in June.
The momentum feeds on itself, as rising SKY price makes holders more likely to lock up their tokens, positioning themselves to earn rewards while benefiting from the higher prices.
Final Summary
- SKY soared 11% in a day as rising fees and trading volume signaled renewed demand for the token.
- Growing capital inflows and consistent holder rewards give traders reason to expect further movement towards $0.06.
