- Sky crypto seemed likely to trend higher in the coming weeks, but faces a key resistance at $0.086
- Altcoin’s short-term momentum was intensely overbought at press time
SKY crypto, rebranded from Maker [MKR] DAO last August, was designed to offer a simpler user experience. The rebranding marked a major milestone in MakerDAO’s “Endgame” Overhaul. The existing MKR governance has since remained in existence, and each can be upgraded to 24,000 SKY tokens.
This token has made strong gains over the past few days. Since the low of 31 May, the token has rallied by 24.8% to hit $0.0788. The short-term bias was bullish, according to the technical indicators.
And yet, the longer-term outlook gave reasons for investors to be cautious. The 1-day market structure was bullish, but there were two retracement levels to be breached.
SKY challenges local highs, maintains three-month uptrend
Source: SKY/USD on TradingView
On the 1-day chart, SKY saw a sharp bearish impulse move that began in December. It started at $0.1, a psychological round number resistance, and fell to $0.036. This move came during Bitcoin’s [BTC] retracement from $106k to $76k.
Since February, SKY has recovered well. To preface the higher timeframe price action, it must be noted that the Fibonacci levels showed that $0.086 was a key resistance for the bulls to break. A move above this level would show that SKY was not retracing its bearish impulse, but trending higher on the higher timeframes.
The market structure has been bullish after the rally to $0.073 in February. Sky crypto made a series of higher highs and higher lows and at press time, was above the 61.8% level at $0.076. The $0.081 local high would likely pose a challenge.
Source: SKY/USD on TradingView
The 4-hour chart revealed firm buying pressure in recent days. Another set of Fibonacci retracement and extension levels were plotted based on the rally from $0.06 to $0.081 in early May.
The hike in OBV and the +0.09 reading on the CMF reinforced the idea of greater demand. The RSI showed that momentum was intensely bullish, and we might see a minor retracement in the next day or two. Such a dip could retest the $0.074 support zone, before resuming the bullish impetus.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
