The SKY token, governance asset of the Sky Protocol (formerly MakerDAO), has surged to multi-week highs, climbing over 8% in the past 24 hours to reach $0.078.

SKY traded around $0.0765 as of writing, with the daily trading volume up significantly amid a broader altcoin uptick.

Ethereum, XRP, and BNB all broke above key resistance levels, while Solana, Cardano, and even Dogecoin looked to mirror the upside.

While the gains aligned with the rally that pushed Bitcoin back above $74,000, positive sentiment around SKY's potential bullish outlook also played a part in the upward move.

According to data from CoinMarketCap, the token has witnessed a 43% pump in daily volume, which stood at roughly $38 million.

Such an uptick in rising price suggests bullish sentiment and likely a factor in trend continuation.

The Sky token is surging days after a pivotal governance vote aimed at reducing staking emissions and expanding USDS lending capabilities.

The proposal, approved via on-chain voting, tightens token supply through lower emissions.

Specifically, the proposal standardized emissions by fixing the allocation at approximately 838.18 million tokens across the coming 180 days.

This outlines a drop of around 161.82 million tokens, a move that eases dilution risks and highlights the potential for price appreciation.

Sky has also boosted protocol utility via enhanced lending markets for the USDS stablecoin.

"With clearer rules, better infrastructure and dedicated providers, staking is becoming a viable yield strategy for asset managers, banks and sovereign players, reshaping DeFi from the inside,” asset manager CoinShares posted on X.

Analysts warn that Bitcoin's uptick to current prices may not mean that the bear market is over.

In this case, a dip for BTC could see SKY revisit key support levels.

With altcoins posting gains and market data showing intraday highs above $0.078, the token could be poised for renewed upward momentum.

At the same time, Sky Ecosystem’s ongoing buyback program — which has repurchased about 1.83 billion SKY tokens using proceeds from USDS — could further support buying pressure.

This is due to Sky cutting the token supply by repurchasing them rather than issuing more tokens to attract liquidity.

Sky could benefit from this as altcoins rotate amid Bitcoin's potential consolidation above $70,000.

A look at the technical picture highlights bullish indicators for a short-term upside.

RSI and MACD offer an upper hand to bulls.

If bulls hold onto support above $0.075, a breakout to $0.100 could allow for price discovery and a new all-time high.

On the flip side, sellers will target $0.070 and $0.065.

SKY traded to an all-time high of $0.1014 in December 2024, which means the current price is about 23% off that peak.

The post Sky token eyes multi-week highs amid volume spike: Why is the token rising? appeared first on Invezz

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