SAND price readies for a crash after The Sandbox moved 120 million SAND, with 86 million tokens going to CEXs
|- The Sandbox price trades with a bearish bias, with multiple fundamentals solidifying the gloomy outlook.
- SAND could fall 5% to $0.3687 as new money enters the market through short sellers.
- This bearish thesis would be invalidated if the gaming token achieves a 12-hour candlestick close above the 200-day EMA at $0.4631.
The Sandbox (SAND) price has been on a downtrend since mid-July, sliding south steadily, capped by a descending trendline. The bearishness came as Bitcoin (BTC) price grew weaker, harming altcoins while adding to the longstanding bearishness in the market.
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The Sandbox price to fall 5%
The Sandbox (SAND) is descending the stairs, as it has been for the last several weeks. With momentum steadily falling, as indicated by the Relative Strength Index (RSI) pointed south and the Awesome Oscillators (AO) histograms in the negative, SAND could crash further to test the $0.3687 support floor or lower to collect sell-side liquidity. Such a move would constitute a 5% drop from current levels.
SAND/USDT 12-hour chart
Several fundamentals bolster this thesis, with open interest and market value to realized value featured in this article.
Recent data on etherscan shows that The Sandbox distributed and transferred up to 120 million SAND tokens, worth approximately $47.62M at present rates, to this address 0x73b4B4290038e22003f241DE95341dC66846d358. From this chunk of tokens, over 86 million SAND has been transferred to centralized exchanges. Whenever tokens are moved to exchanges, it is often a sign of intention to sell, bolstering the bearish thesis described above.
Open interest
The chart below shows that open interest is growing while The Sandbox price is on a downtrend. This suggests a strong bearish trend as the number of traders placing short bets against SAND is more than that long. Simply put, there is more selling than buying, hence bearish pressure.
SAND Open Interest
With The Sandbox price falling, new contracts dominated by shorts are being created, making the market overly bearish.
Open Interest, funding rate FAQs
How does Open Interest affect cryptocurrency prices?
Higher Open Interest is associated with higher liquidity and new capital inflow to the market. This is considered the equivalent of increase in efficiency and the ongoing trend continues. When Open Interest decreases, it is considered a sign of liquidation in the market, investors are leaving and the overall demand for an asset is on a decline, fueling a bearish sentiment among investors.
How does Funding rate affect cryptocurrency prices?
Funding fees bridge the difference between spot prices and prices of futures contracts of an asset by increasing liquidation risks faced by traders. A consistently high and positive funding rate implies there is a bullish sentiment among market participants and there is an expectation of a price hike. A consistently negative funding rate for an asset implies a bearish sentiment, indicating that traders expect the cryptocurrency’s price to fall and a bearish trend reversal is likely to occur.
MVRV ratio and daily active addresses
The Sandbox price’s bearishness is also supported by the declining number of daily active addresses, meaning the number of addresses interacting, say through transactions, per day has been declining.
SAND Santiment
Regarding the Market Value to Realized Value (MVRV) metric, which shows aggregate investor behavior, The Sandbox MVRV is edging north steadily. This is often interpreted as the market capitalization of SAND is outpacing its realized capitalization.
As the Sandbox market capitalization growth outpaces the realized capitalization, the MVRV values rise, pointing to the possibility of traders’ intentions to sell. In the chart above, the MVRV is at -3.329%, with the negative connotation showing that SAND is undervalued on average. As such, if all the SAND coins were sold, most traders would incur losses at the asset’s current price of $0.3917.
However, if sidelined or late investors buy The Sandbox at current levels, the SAND price could break above the descending trendline, increasing the odds for a correction. In this regard, the altcoin’s market value could rise to breach the 50-, 100- and 200-day Exponential Moving Averages (EMA) at $0.4137, $0.4276, and $0.4631, respectively.
A 12-hour candlestick close above the 200-day EMA would invalidate the bearish thesis, but conservative traders may consider waiting for confirmation above the $0.3687 resistance level. Such a move would constitute a 5% rise from current levels.
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