SKY -11.53% Due to Sharp Technical Deterioration

On SEP 21 2025, SKY dropped by 11.53% within 24 hours to reach $0.06928, SKY dropped by 979.7% within 7 days, dropped by 979.7% within 1 month, and dropped by 979.7% within 1 year.

Technical indicators show a deteriorating trend for SKY over recent trading sessions. The asset has breached key support levels, triggering a bearish momentum across both short- and long-term timeframes. The Relative Strength Index (RSI) is currently below 30, signaling oversold conditions, though this has historically failed to halt further declines when trend strength remains bearish. The Moving Average Convergence Divergence (MACD) has crossed below the signal line, reinforcing the bearish bias. Additionally, the 50-day and 200-day moving averages have formed a bearish crossover, commonly interpreted as a sign of weakening investor sentiment and potential continuation of the downward trajectory.

Price action over the last month has exhibited limited signs of recovery, with SKY struggling to retest or surpass key resistance levels. A consistent pattern of lower highs and lower lows has been observed, forming a clear descending channel. Traders have noted a lack of significant buying pressure to reverse the trend, with the asset failing to respond to typical market stimuli. The absence of a definitive bottoming pattern in the price structure suggests that the decline may persist until a new equilibrium is established or a strong external catalyst emerges.

The deteriorating technical outlook is compounded by weak on-chain metrics, with reduced wallet activity and declining transaction volumes. These signals suggest a waning interest in SKY from both retail and institutional participants. In contrast to earlier bullish phases where accumulation was evident, recent on-chain data shows a distribution pattern, indicating that holders are increasingly liquidating their positions.

Backtest Hypothesis

The backtesting strategy aims to model potential outcomes by applying a systematic approach based on the current technical indicators. The strategy is structured around a set of predefined rules triggered by the RSI and MACD signals, as well as the slope of the 200-day moving average. When the RSI dips below 30 and the MACD line falls below the signal line, the model initiates a short position. A long position is entered only when both indicators show a reversal toward the overbought threshold. The 200-day moving average is used as a secondary filter to confirm the overall trend direction, preventing the model from entering trades against the dominant market sentiment.

This approach seeks to capture the current bearish momentum while avoiding noise in the market. By focusing on high-probability signals and reinforcing them with trend confirmation, the backtest aims to evaluate the potential effectiveness of a trend-following strategy in the present environment. Given the observed weakness in SKY, the strategy is designed to profit from extended downtrends or to minimize exposure during consolidation phases.