The Spark Protocol token has bounced back in the past few days as investors buy the dip and as the total value locked in the network nears its highest point on record.
Spark (SPK) rose to $0.045 today, June 30, its highest level since June 24 and 25% above its lowest point this year. The rebound has brought its market capitalization to nearly $40 million.
SPK’s recovery comes as data shows the TVL in the network has climbed to $6.28 billion, just shy of the all-time high of $6.7 billion. This marks a significant jump from the $3.8 billion recorded at the start of the year.
The surge in TVL is a sign that demand for Spark’s yield-bearing products is rising. Its savings TVL has crossed the $3 billion milestone, while the 30-day average savings rate has moved up to 4.5%.
Demand for Spark’s lending solution is also rising, with total value locked nearing $3.5 billion. This mirrors the growth of other lending protocols like Aave and Maple Finance.
SPK’s rebound is also fueled by the growing view among investors that the token is highly undervalued compared to its peers. For example, Spark’s fully diluted valuation is still smaller than Pendle’s (PENDLE) $1 billion, despite Pendle having a smaller TVL of $5 billion.
It is also smaller than JustLend’s $336 million valuation, even though Spark’s TVL is significantly higher at $3.6 billion.
A potential reason for the recent SPK price plunge following its Ignition airdrop is the token’s supply dynamics. While its circulating supply stands at 894 million, the total supply is capped at 1 billion, suggesting substantial future unlocks that could lead to dilution.
Spark price technical analysis
The hourly chart shows that SPK crashed and bottomed at $0.035 after its airdrop. It has since bounced back by over 25% and moved slightly above the 23.6% Fibonacci retracement level.
The token has also formed a bullish W pattern, with the neckline sitting at the 50% retracement level of $0.050. Additionally, it has moved above the 50-period moving average. Therefore, the Spark Protocol price will likely see a strong bullish breakout, with the initial target set at the 50% retracement point around $0.051.
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