Spark Protocol Token SPK Surges 25% as TVL Nears All-Time High

Spark Protocol token (SPK) has experienced a notable rebound in recent days, driven by investors capitalizing on the dip and the total value locked (TVL) in the network approaching its all-time high. As of June 30, SPK reached $0.045, marking its highest level since June 24 and a 25% increase from its lowest point this year. This recovery has boosted its market capitalization to nearly $40 million.

The resurgence of SPK coincides with a significant increase in the TVL within the Spark network, which has climbed to $6.28 billion, just below the all-time high of $6.7 billion. This represents a substantial jump from the $3.8 billion recorded at the beginning of the year. The surge in TVL indicates a growing demand for Spark’s yield-bearing products, with its savings TVL surpassing the $3 billion milestone and the 30-day average savings rate rising to 4.5%.

Additionally, demand for Spark’s lending solutions is on the rise, with the total value locked nearing $3.5 billion. This trend mirrors the growth observed in other lending protocols. The increasing demand for Spark’s products suggests a positive outlook for the token, as investors recognize its potential for growth and yield.

Investors are also increasingly viewing SPK as undervalued compared to its peers. For instance, Spark’s fully diluted valuation remains smaller than Pendle’s $1 billion, despite Pendle having a smaller TVL of $5 billion. Similarly, Spark’s valuation is lower than JustLend’s $336 million, even though Spark’s TVL is significantly higher at $3.6 billion. This perception of undervaluation has contributed to the recent price rebound of SPK.

However, a potential factor behind the recent price plunge of SPK following its Ignition airdrop could be the token’s supply dynamics. With a circulating supply of 894 million and a total supply capped at 1 billion, there is a possibility of substantial future unlocks that could lead to dilution. This supply dynamic may have influenced the recent price movements and could continue to impact the token’s value in the future.

Technical analysis of SPK’s price movements reveals that the token crashed and bottomed at $0.035 after its airdrop. It has since rebounded by over 25% and moved slightly above the 23.6% Fibonacci retracement level. The formation of a bullish W pattern, with the neckline at the 50% retracement level of $0.050, suggests a potential strong bullish breakout. Additionally, the token has moved above the 50-period moving average, further supporting the bullish outlook. The initial target for the Spark Protocol price is set at the 50% retracement point around $0.051.

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