Sapphire Market Correction

Sapphire has seen an explosion in market capitalization over the past week.  This usually results in price fluctuations due to increases in the volume of material being traded. In turn, it is a sign that a trading company may be attempting a price correction of the material.

Price to Volume comparison of Sapphire over the past four weeks. The recent spike is due to a trade company submitting items on the market in an attempt at forcing a price correction.

Based on what we see, a price correction appears to be the goal. The two “steps” up in price are an indication of a price correction, which are further supported by the injection of additional market capitalization at the same time.  The additional volume of material allows the seller to provide their own price expectation which, due to them temporarily having a majority of the market share, allows their price to influence the overall price of that material.

In this case, they are raising Sapphire by over $1kpp.  It’s too early to tell if this will be successful, but the timing of the correction around the Aukai Auction is an indication of their likely motive.  That means there is a time limit to how long this correction will be available on the market, which is an important factor since it means you need to decide quickly how you are going to react if you are in the Sapphire business.

If you are a Sapphire buyer, this might be the right time to place a few options to see what happens.  After reviewing the real-time price index, the recommended buy price threshold (the lowest possible amount needed to be considered a serious request) is $5.8kpp.  You might try listing it at $6.1kpp and see if the price manipulator will bite or is holding firm.

If they bite, you will net between $1.2kpp to $1.7kpp in re-sell value (depending on how you negotiate) after the auction ends, which is a 30% profit margin if you are into that kind of thing.

Otherwise, if you are a seller, our advice is to hang tight and see where things end up.  If the price correction sticks, you can list Sapphire at a higher rate.  If you try to sell it now, you will likely be outbid by the group that is trying to adjust prices and will ultimately lose out.  You want to wait for the overall market capacity (orange line on chart above) to start falling, which means buyers are removing the excess volume and prices are stabilizing.

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