Sandbox price (SAND) appears to be on the verge of reclaiming the $0.40 area, barely 24 hours after an abrupt shift in market momentum triggered a reversal to $0.36. On-chain data trends and dramatic moves in derivatives markets provide insights into SAND’s likely next price movement.
SAND price rallied 8% on Thursday after falling to a weekly low of $0.36 following Changpeng Zhao’s exit from Binance. Here’s how Sandbox traders’ reaction to market volatility could impact SAND price in the coming day.
The leadership change at Binance has caused severe volatility in the crypto markets this week. Key derivatives market indicators show that bullish sandbox traders have doubled their positions after suffering a massive decline on Wednesday.
According to derivatives market tracker Coinglass, $8 million worth of SAND futures contracts closed on Wednesday amid the market downturn.
However, a closer look at the open interest chart shows that the SAND derivatives market recovered barely 24 hours later with capital inflows of $4 million. After falling to $36.4 million on Wednesday, SAND futures markets’ capital balance is now back above $40.4 million as of press time on November 23.
Sandbox (SAND) Open Interest | Source: Coinglass
Open Interest quantifies the total capital invested in active or outstanding perpetual futures contracts for a specific cryptocurrency asset. Typically, an increase in open interest after a period of unusually high long-term liquidations can be bullish in several cases.
First, it suggests that other existing long traders are choosing to double down and cover their positions in anticipation of a quick bullish reversal.
An increase in open interest following a strong price downtrend may indicate a change in market sentiment. Traders opening new positions may believe that the market has reached a support level or that previous selling pressure was excessive, leading to a possible rally.
The 8% increase in Sandbox price in the last 24 hours lends credence to this thesis. If open interest increases, SAND price is likely to maintain its current uptrend.
Read more: 10 Best Metaverse Platforms to Watch Out for in 2023
Sandbox top holders have jumped in to avert major losses
As the Sandbox price fell to $0.36 on Wednesday, the largest investors in the ecosystem bought on dips. And barely 24 hours later, this appears to have played a crucial role in defending the key support level at $0.35.
According to on-chain data from Santiment, the top 20 investors in the Sandbox Metaverse ecosystem accelerated the buying trend around November 15, just as the price began to decline.
Between November 15th and 20th, they increased their holdings from 2.39 billion to 2.40 billion SAND. And since the crypto markets collapsed on November 21st, they have added another 10 million SAND to their balances.
Valued at the current SAND price of $0.36, the whale has invested about $4 million in the last 48 hours. Drive the early rebound effectively.
Sandbox (SAND) supply is held by the top 20 addresses | Source: Santiment
The Top Offer metric tracks trading activity and sentiment among the largest investors within a cryptocurrency ecosystem. In general, an increase in the balances of top holders during a price downtrend is a bullish signal. Most importantly, the liquidity provided by the $4 million inflows from sandbox whales has allowed panic sellers to execute their exit trades without causing a significant price drop.
More importantly, the largest investors remain confident that the price drop is not due to a significant deterioration in the project’s fundamentals. If strategic retail investors pick up on this positive outlook, SAND price could begin an upward trend in the coming days.
Read more: The best upcoming airdrops in 2023
SAND Price Prediction: Breaking $0.50 could strengthen the rally
From an on-chain perspective, increasing whale demand and increased capital inflows into the sandbox derivatives markets are key factors driving the ongoing SAND price rally. Since these indicators are still in an uptrend, Sandbox price is well poised for an extended rally.
The Global In/Out of the Money (GIOM) data, which groups current sandbox investors by their entry prices. This also confirms this bullish price forecast.
However, it shows that bulls need to overcome the initial resistance at $0.45 to have confidence in a possible parabolic breakout.
As shown below, 22,810 addresses purchased 100.5 million SAND at an average price of $0.45. If these investors exit early, they could inadvertently trigger a SAND price correction.
But if the bulls can overcome this sell wall, the price of The Sandbox’s native token is likely to return to $0.50 as predicted and potentially move towards $1.
The Sandbox (SAND) price prediction | GIOM data | Source: IntoTheBlock
Conversely, the bears could nullify this positive forecast if SAND price falls below $0.35. But in this case, the 13,330 addresses purchased 953.2 million SAND at the highest price of $0.37. These investors could provide initial support. And if these investors cover their positions as seen this week, SAND price will likely avoid a major downturn
Read more: The best crypto signup bonuses in 2023
Disclaimer
In accordance with Trust Project policies, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult a professional before making any financial decisions.
Comments are closed.