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Siacoin’s (SC) token price has made a strong bullish breakout as it jumped to its highest point since November 2021. It has risen for four straight weeks and by over 713% from its lowest level in 2023, giving it a market cap of over $967 million.
Why Siacoin is soaring
Siacoin is a blockchain network in the Decentralised Public Infrastructure (DePIN) space. It is a Filecoin alternative that allows people to share their free storage space through the blockchain.
Users like individuals and companies can then rent this space and pay a small fee using the SC token, creating a mutually beneficial situation.
This business model has some major risks, with the biggest one being that these companies compete with some of the biggest cloud companies in the world like Microsoft, Google, and Amazon.
These companies have excellent cloud storage solutions that are not very expensive. Also, their networks have a long track record of performance and uptime.
As a result, data provided by Siacoin shows that the amount of used storage is significantly smaller than the total provided storage.
Its total storage stands at 7.31 PB while the total used storage is 1.45, meaning that only 20% is being used.
It is not clear why the Siacoin price has jumped sharply in the past few months. A likely reason is that investors are turning to DePIN projects like Filecoin, Render Token, and Helium. All these coins have jumped sharply in the past few days.
Meanwhile, the SC token surge has led to a major increase in shorts liquidations. Data compiled by CoinGlass shows that the volume of shorts liquidations jumped to over $40k on Wednesday, its biggest figure in a month.
This figure does not provide the clearest picture of these liquidations since it is from one exchange, Bybit. Bybit is not the biggest provider of Siacoin. According to CoinMarketCap, the biggest exchanges offering the coin are Binance, Bybit, and Kraken.
Siacoin price forecast
Siacoin chart by TradingView
Turning to the daily chart, we see that the Siacoin token price has gone parabolic in the past few days as the crypto bull run has continued.
It recently crossed the crucial resistance point at $0.0135, the highest swing on January 23rd. This price action has helped it to invalidate the double-top pattern.
Further, the Relative Strength Index (RSI) and the Stochastic Oscillator have moved to the extreme overbought point.
Therefore, while the long-term trend is bullish, I suspect that the coin will retreat soon and retest the now-support at $0.013. Such a move will likely lead to more continuation in the coming weeks since this is known as a break and retest pattern.
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