I'd not seen the spelling "sike" until today; but I've been spelling it "psych" since I was in grade school in the early 70's. Definitely derives from "psyching someone out", i.e., confusing them or tricking them (in that I first heard "psych" as shorthand for "psych out"). I wouldn't be at all surprised if it's older than that.

I use "psych" too. Bummed me out when I learned "sike" was the correct spelling.