Over the past week, The Sandbox (SAND) has experienced a 75% surge in value, reflecting a broader uptrend in the cryptocurrency gaming industry. Currently, SAND is trading at $0.602, showing a 4% decline in the last 24 hours. Trading volumes have simultaneously decreased by 51% according to CoinMarketCap data.
The recent price surge for SAND has been accompanied by heightened market volatility, evident from the expanding Bollinger bands observed on the altcoin’s four-hour chart.
The bullish momentum that was prominent earlier on pushed SAND above the upper Bollinger band. However, as of now, the price has moved back towards the middle band, indicating a potential slowdown in buying pressure.
Similar to the market trend, the Relative Strength Index (RSI) has also shifted, falling from overbought levels to 53. Moreover, the RSI line is now below the signal line, suggesting that selling pressure is influencing price movements.
Currently, there seems to be a defense of the immediate support level around $0.58. If this support fails to hold against continued selling pressure, SAND might dip towards the lower Bollinger band at $0.501.
Possible increase in volatility due to liquidations
Recent data from Coinglass indicates that over a span of four days, leveraged traders on The Sandbox have faced liquidations worth over $44 million. These forced liquidations, whether through selling or buying, have contributed to the increased volatility in the market.
The impact of these liquidations reflects in the open interest, which has dropped by 6% to $168 million. This decline implies that traders are refraining from initiating new positions in SAND.
While a decrease in derivative market activity could reduce volatility, it may also lead to a consolidation phase for SAND.
Decline in active addresses signals reduced market activity
The decline in active addresses associated with SAND in recent days, from 3,809 to 1,821 according to CryptoQuant data, points towards a decrease in market participation. This decline could be indicative of dwindling market sentiment due to a lack of new upward movements.
If this low demand trend persists, SAND’s downward trajectory might continue.
Future outlook for SAND
The absence of buyers capable of absorbing the selling pressure on SAND could potentially trigger further declines for the token. With the RSI signaling a weakening uptrend following its crossover below the signal line, a trend reversal could be looming should buyers re-enter the market.
Traders should monitor the situation closely for a potential drop below the lower Bollinger band, as this could further dampen market sentiment and drive prices downwards.