Sky (SKY) is up across the market, with the asset up 12% in the past 24 hours. In fact, its technical picture seems to indicate the possibility of continued bullish momentum on the charts.
While on-chain activity charted a clear path at press time, chart patterns indicated that cryptocurrencies could extend further and extend their trajectory.
Is the financing rate overheated?
The clearest indicator indicating a continued rise was the financing rate data. Funding rates reveal the direction in which capital tends in the permanent market and whether long or short positions dominate the flow.
At the time of writing, the funding rate is flashing positively while remaining at a fairly high level. This indicates that the bullish situation has not turned excessive, with the price still favoring the price.
What seemed to make this trend look sustainable was the influx of new capital into the market, with open interest rising. In fact, open interest jumped 14.25% to $30.24 million at the time of writing.
The total of these flows amounted to $4.3 million during the past 24 hours. A capital move while the funding rate remains positive may be evidence that long-term traders are still anticipating and preparing for further upside, without turning too bullish.
At press time, the funding rate was just 0.0054% – a fairly bullish reading that may be enough to keep the outlook intact.
Volume rises in sync with price
Trading volume has continued to rise along with the price, a combination that indicates positive momentum behind the altcoin.
At the time of writing, trading volume was up 106% and reading reached $31 million. A closer look at the permanent market also revealed the same sentiment running through this sector.
The market’s perpetual buy-to-sell ratio also rose, reaching a new high of approximately 1.27. This indicates that most trading accounts tended to be bullish.
The long to short ratio measures whether bulls or bears are driving the market. A reading above 1 typically indicates increased buying volume, while a reading below 1 typically indicates increased selling volume.
in Skye casethe ratio continued to trend upward, meaning that more accounts shifted in the same direction as the altcoin maintained its upward trend.
Is SKY eyeing the next resistance level?
SKY showed bullish signs on the charts, with the altcoin breaking a downward resistance trend line that it had been lagging behind for weeks.
After this breakout, the price crossed another major horizontal resistance level and continued to rise. For a confirmed bullish forecast, the price needs to close comfortably above this level and continue to form bullish candles.
Two main levels of interest will be triggered if buying pressure continues, and are identified by the two boxes on the chart. Clearing it would usefully change price expectations.
At press time, the Accumulation/Distribution Index – which tracks whether buying or selling is dominant – showed the former to be dominant, implying that SKY could lead to a further rally.
Final summary
- SKY rose 20% in one day, with money flowing into the market suggesting that traders may be betting on the rally to continue.
- Rising volume and a growing bias towards buyers indicate real momentum behind the move.
