SKY -393.69% in 1 Year Amid Regulatory and Market Pressures

On SEP 19 2025, SKY dropped by 216.69% within 24 hours to reach $0.07581, SKY dropped by 131.41% within 7 days, dropped by 131.41% within 1 month, and dropped by 131.41% within 1 year.

A sharp decline in SKY’s value has been attributed to increased regulatory scrutiny and the broader bearish sentiment affecting the crypto market. Authorities have taken a more aggressive stance in recent months, with several enforcement actions targeting decentralized finance (DeFi) platforms and tokens lacking clear compliance frameworks. SKY, which has long operated without a centralized structure, has found itself under the regulatory spotlight. This has led to heightened selling pressure, as institutional and retail investors alike reassess their exposure to non-compliant assets.

Technical analysis of SKY’s price movement reveals a breakdown below key support levels, which had previously acted as a floor for the asset. The RSI indicator has moved into oversold territory, signaling potential for a rebound, but the MACD has remained in a negative trend, indicating bearish momentum. Analysts project that the asset may remain range-bound or continue to trend downward unless there is a significant shift in market dynamics or regulatory clarity.

Backtest Hypothesis

A backtesting strategy has been proposed to assess potential trading opportunities based on the recent price action of SKY. The hypothesis involves a trend-following approach utilizing moving averages and the Relative Strength Index (RSI). The strategy would open short positions when the 50-day moving average crosses below the 200-day moving average, and RSI remains below 30, indicating oversold conditions. Long positions would only be considered if the 50-day moving average crosses above the 200-day moving average, while RSI exceeds 70 and price breaks above a defined resistance level. Stops and limits are placed at key Fibonacci retracement levels to manage risk.

The backtesting period is designed to cover the last 12 months, incorporating the asset's sharp declines and periods of consolidation. The strategy’s effectiveness will be evaluated based on win rate, risk-adjusted returns, and drawdowns. Given the current bearish environment and the lack of a clear catalyst for recovery, the hypothesis suggests that a short-biased approach may be more effective in capturing near-term price movements.