Yesterday, changes to SLP earnings were made:
- Daily quest and adventure mode SLP rewards have been removed
- SLP rewards have been reduced at certain MMR brackets.
- Trainers under 800 MMR will now receive 1 SLP per win (increase from 0)
Over the past few days, SLP price has tripled. Why?
When the price goes up, it means there are more buyers than sellers. (price is a function of supply and demand - read more here: https://www.britannica.com/topic/supply-and-demand)
So why are there more buyers than sellers right now?
There is ONE real use case for SLP - breeding. There are TWO reasons people buy SLP - breeding and speculation (speculation means buying in the expectation that the price will increase with intention to ❗ sell later at a (hopefully) higher price ❗ - important point).
So which of the two reasons above is the main reason why people are buying SLP right now? Is it for breeding? Or is it for speculation? This one is very simple to answer, we look at the SLP minting and burning chart.
In this chart 👆, I'm ignoring how much is minted (as explained above, we need to wait 14 days to see this take change) and focusing on how much is burned - which shows how much SLP is being used for breeding.
We can see that despite people buying lots of SLP (indicated by price increase) - people are not using this SLP for breeding. Which suggests that almost all the SLP being bought right now is people speculating - buying to sell later.
So why is the price going up? Simple. People are buying it speculating the price will keep going up. Those who have SLP (managers/scholars) are holding in hopes of being able to sell at higher prices.
On the other hand - speculative price runs can continue for irrational periods of time, so it's also possible (although I think unlikely) that this price rise continues for some time.
I want to take some SLP profit too, how do I judge a good price to do this?
When SLP is running mostly on speculation, technical analysis starts to work very well. Let’s look at two charts - SLP vs USDT and vs ETH:
SLP vs USDT
SLP vs ETH
Support turned Resistance Often price areas that were previously support (example 6c and 4c) will later turn into resistance - because people who bought at support will want to sell when price comes back to their entry to exit at a breakeven ("oh thank god the price came back to my entry I can finally get out").
However the major area of resistance is at 6c.
Moving average and confluence with support/resistance We also have the 100 period moving average right now at 4c. So we have multiple areas of resistance at the current price giving confluence.
What about the future of SLP price?
This is a topic that is much debated. Come and discuss with us in Discord!