SIGN rose 30% today, and I tried to judge whether this wave of increase has real buying support.
Trading volume is key.
Today's trading volume is nearly double the average of the past week, approaching $110 million. The simultaneous increase in volume and price indicates that there are indeed people buying, not just market makers washing trades.
However, "people are buying" and "this wave of increase can be sustained" are two different things.
The scenario I am most worried about is: the unlocking party sells some of the chips to market makers or institutions in advance off-market, and the latter gradually sells out at today’s price, while retail investors see the increase and rush in to take over. In this scenario, the trading volume is real, but the direction is flowing from the unlocking party to retail investors, not the other way around.
One method to judge these two scenarios is to look at the price 48 hours after unlocking—if the unlocking is smoothly absorbed by the market, the price can hold steady or even continue to rise; if unlocking triggers concentrated selling, those who rushed in today will face pressure within 48 hours.
A 30% single-day increase without news support, on the eve of the unlocking node, I tend to be cautious.
But there is one thing I admit I cannot judge: if there is an unpublished government contract progress for Sign, and this wave of increase is a real value reassessment, then my caution would be wrong. Asymmetrical information is the everlasting underlying issue in this market.
Let’s see after tomorrow.
