MANTRA (om) 
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The Sky Protocol token has experienced a significant rebound over the past few months, aligning with a broader surge in large-cap decentralized finance (DeFi) tokens. On Monday, June 16, the SKY price reached a peak of $0.09475, representing an impressive 190% increase from its lowest point earlier this year. This rally has propelled Sky Protocol’s market capitalization to over $1.95 billion.
Sky Protocol’s Rally in Context
The recent surge in the SKY token mirrors gains seen in other major DeFi projects. For instance, Aave has witnessed a 147% increase from its lowest point in April, while Jito has risen by 50% during the same timeframe. However, despite these upward trends, third-party data indicates that Sky Protocol’s network growth is slowing.
Declining Total Value Locked (TVL)
According to data, the total value locked (TVL) in Sky Protocol’s platform has dropped to 1.87 million ETH, marking its lowest level since June 2020. This is a notable decline from its year-to-date high of 4 million ETH and its all-time high of nearly 6.98 million ETH. This reduction in TVL signals a slowdown in network activity, even as the token price rises.
Revenue Trends
Sky Protocol’s revenue has also declined in recent months. While it peaked at $28.37 million in December last year, revenue fell to $17 million by May, reflecting broader market challenges in the DeFi sector.
Smart Money and Whale Activity on the Rise
On a positive note, recent data shows increased activity from smart money and whale investors. Over the past 30 days, smart money holdings of the SKY token have surged 148% to 3.28 million, while whale holdings have increased dramatically by 2,246% to 252.90 million. This accumulation trend suggests growing confidence among large investors.
Additionally, exchange balances for the SKY token have decreased by 8% to 208 million. This decline indicates that investors are moving their tokens from exchanges to self-custody wallets, a common practice when holders plan to retain their assets for the long term.
Understanding Sky Protocol
Sky Protocol, formerly known as Maker, is a yield-generating platform that allows users to save their USDS stablecoin and earn yields. According to its official website, the platform offers a Sky Savings Rate of 4.50%, making it an attractive option for those seeking passive income opportunities in the DeFi space.
Technical Analysis of SKY Price
The daily price chart for SKY shows that the token bottomed out at $0.03285 in February. Since then, it has been trading within an ascending channel, characterized by higher highs and higher lows. This upward trajectory recently pushed the token above a critical resistance level at $0.07980, which was the previous high on February 28.
Further bullish indicators include the token’s movement above the 50-day moving average and the rising trends in both the MACD and Relative Strength Index (RSI). Notably, the RSI is approaching overbought territory, signaling that the token may face resistance in the short term.
Potential Price Movements
The most likely scenario in the near future is a pullback in the SKY price to retest the key support level at $0.07980. Conversely, a breakout above the upper boundary of the ascending channel could pave the way for further gains, potentially pushing the price towards the psychological milestone of $0.10.
As the DeFi market continues to evolve, keeping an eye on key metrics such as TVL, revenue trends, and investor activity will be crucial for understanding the trajectory of the Sky Protocol token.
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