The Market Structure of Splinterlands Couldn't Be More Bullish
Not financial advice. I'm a hamster.
Market structure tells you everything you need to know about a market.
It can change pretty rapidly if some sort of a shock happens but usually, if you have some idea of what's happening in a market and you can look at the structure, you can see what's coming next.
Splinterlands is different from most markets because you can dig into each and every piece of inventory across multiple categories of cards and see how it fits together.
And when I do that, I just get giddy looking at what is coming next.
I just talked about this some in my last post but its important enough I felt it deserved it own post.
For this, I want to look at the floor in Alpha Common cards. Each card has thousands in print so you can really get some good information by looking at the chain.
The first thing you want to look at is just an overview of the bottom prices of all the cards in the group.
Looking at these there's nothing too surprising. Flesh Golem has become a very popular card and it's pulling away at almost 12x the price of the lowest card.
But ifyou look a little closer, there is an interesting thing happening here. Seee how there are levels. Stairs between the prices. You have a few cards at $4 and then 2 at $6 and thhen $9and then we jump to $13-15 and then we just to around 18-19 before Fleshy blows everyone out.
It's not perfect but realy look at it you'll see that people price at certain levels. And once those levels are bought up, the next level becomes the new floor in that card. In these cards, the game has been to buy up the cheapest card up to the next level to get the whole floor to rise. It's strategic buying that happens because there actually aren't enough sellers to make prices more smooth.
Now let's take a look at the levels. A buyer like me is looking for instant value. When I see this, I see 4 cards that are lagging the market by around 50%. So I want to see what it would take to buy the floor on those three cards because if I can buy them up to $6, the new psychological floor is going to be $6.50 on all Alpha Common cards and of course I just bought a bunch at $4 so I'm instantly up 50%.
Let's start with Silvershield Warrior who is the laggard of the laggards.
So right here we see that there's actually only one card at $4. ANd that's not just of this monster but of every single Alpha common. Once that one card is bought, the floor on the whole category rises 13.75%. If you already have some, buying that one card just boosted your portfolio value. I do have a bunch of these so please hold while I buy this card now lol. OK, new floor $4.55 which unsurprisingly is the exact price of the other two its with.
I don't want to post 5 screen shots so I'm going to jump to the end of this price range. There are just a few sellers here lumped in around $5. Being that almost every other card in this categor is higher than $5, this means a few sellers are selling below market value and it won't last long before smarter money comes along and takes it out for instant profit.
Once someone comes in here with about $200, the floor in this doesn't just run to $6. Suddenly Silvershield warrior jumps to the $15 land. ANd instant triple of your $200. And since it makes sense in the context of the overall market for an Alpha common card to be $15, it will most likely not attract more sellers who will push the price back down. Notice also the $15 floor is only 2 deep. But if you bought those and pushed it to $33 (which isn't a level), now you'd probably see the $18 sellers coming in.
Still though, that's how you turn $200 into $700 in value instantly.
I won't bother looking at the other two at the $4.55 level but just so you know, the floors are even thinner. What we will do though is think about the fact that especially if one of these is lifted, the other two will become even juicier targets because now they look even more undervalued and the incentive to bring them up to par with the others will be greater. And as you saw with Silvershield Buddy, usually we just skip the next level when they get bought up.
Let's now jump to the $6.50 level with Haunted Spider. What we see is the same thing. There are about 15 listings from a few sellers between $6-7.99 and then look at the ramp through the next levels just a few cards thin. Again, a few hundred bucks and instant value.
If we jump to the $15 level you'll see we're one card form the $19 level. Then there's basically one seller at $20 with a fair amount of inventory but as the others move up, there will be incentive to take that inventory out.
But of course the Alpha Commons don't exist in a vacuum. They interact with the floor in the Alpha Rares and the Rares interact with the Epics. The legendaries do their own thing though lol. Take a look at how the prices of the rares start right at about the bottom row of the commons and the epics start right about at the bottom row of the rares. Each with a few overlaps but basically around the same place in line.
When one starts moving, it pushed the next and right now they are all moving.
So what's the takeaway here?
First its that this market is predictable if you look at the market structure. We looked at the Alphas but all throughout this market you will see the same things.
And second, as long as there are no major shocks like a scandal or something, the structure it telling you its going to keep going up rung by rung.
Of cousre market structure isn't everything but when you combine market structure with the fact that we are seeing 5-6% player growth every single day and we are seeing sellers removing listings or just holding off even as prices soar higher, it seems what market structure is saying is probably true.
Not financial advice. I count on my toes.