Before I begin, I must say that these are not financial advice and these are merely my thoughts that I wish to share with the community. I hope to shed some light on what's happening and help you in some way make your own decisions.

Introduction

I've always thought that Technical Analysis [TA] shouldn't be too difficult. I've seen people analyze with so many lines, shapes, and countless technical indicators that the whole chart looks pretty confusing to others. My practice is that simplicity is key and TA should be used as a guide not a rule. Without further ado, here's my take on where I think SPS is going.

The Chart

We can see a Cup and Handle forming. This is commonly known as a bullish pattern, which means that once the pattern is formed, SPS to the moon! But before that, let's look back at what happened.

After the announcement of the Chaos Legion, the value of SPS spiked due to the introduction of vouchers. Now that the vouchers have already been released, the demand for SPS on the market has decreased as people who wanted to buy have already bought.

As the overall demand for SPS continues to decrease, we see the price starting to drop. But it seems to be dropping too much. The question is:

Why is it Dropping?

I think these 2 are the main reasons.

1. Take Profit We must remember that SPS is first and foremost a cryptocurrency. Yes it has it's uses just like any cryptocurrency, but not every holder of the coin is in it for the vouchers. A lot of players purchased the token when it was doing around 0.20-0.30 USD. These players were capitalizing on the incredibly high APR that SPS staking was giving at the time. Now that the APR is lower, the benefits to holding SPS has significantly decreased, but the benefits of selling it has increased. Therefore, now that we can see a downtrend in the short term, most holders, would choose to take profit and reinvest at a lower price point, or even other investments.
2. Whale Manipulation This is a highly likely scenario. If you want to buy more packs for cheap, you will be using SPS to get that sweet 10% discount. This will be based on the current market value, so what's the easiest way to get an even bigger discount? You should buy SPS on its dips. If you can't wait for the dips, you create it. This is the usual dumping scenario of the whales. But good news! Because they're dumping, we can buy too!

The Fibonacci Retracement

Back to TA again. So when we look at the chart, you can see the different colored lines. That's a Fibonacci Retracement. The logic behind this is that everything has a relationship that can be expressed by Fibonacci. In a way, human behavior is also quantified through such methods. Another way to look at it is since everyone is using the same TA tools, then we're all looking at the same things as our guides.

Where will it stop?

So using the Fibonacci retracement, it is highly likely that we will be seeing a bounce at either the 0.5991 USD level or the 0.4591 USD level. Based on my experience, the strongest bounce should be at these 2 levels, but the first support level was already broken. This means that the 0.4591 USD level is a highly likely bounce.

Another Possible Scenario

I tried fixing the retracement so the bottom of my drawing reflected the key support. In this scenario, the next bounce is either on the 0.5564 USD level or the 0.4794 USD level.

Remember, TA is just a guide so that when we look at charts, we have a systematic way of looking at the data.

My Plan

Now to the part some of you are looking for. Given all of these data, where should I buy? My current average is around 0.3 USD, but of course I would be willing to average up as I am long term bullish with Splinterlands. This means that I am just waiting for a good bounce candle to add. The most likely scenario in my opinion is a strong bounce on the 0.45 USD level. If it goes anywhere near that you can bet that I will be adding more SPS. For now, I've been buying in small tranches ever since it hit below 0.8 USD.

Now that SPS is getting cheaper, are you going to allow yourself to be left behind? Dear reader, I have but one question for you.

What's your plan?

Comment down below!