Sanbox’s crypto token ($SAND) experienced a 290% price increase in the month of November, and recently the price went up from $0.30 to $0.75-$0.80, a more than 100% increase in just one day. A price increase of this scale and stature may be attributed to several reasons, including a reignited interest in GameFi and metaverse, speculative market activity, and an expansive bullish sentiment in the market.
A Historical Overview of SAND
$SAND is the utility token native to the Sandbox ecosystem, which is a decentralized virtual gaming world offering users the chance to create, own, and monetize content within the metaverse.
The token was launched in 2020, and it has gained good traction ever since, with the price peaking at $8. However, it was followed by a quick and steep decline in price.
Potential Reasons behind $SAND Token Price Increase
$SAND’s 30-month-old descending trendline has finally caught a break in November, especially in the last week with the impressive surge in price.
While several other reasons can be discussed for the descending trend line to break, the moment the price reached closer to the line, bulls took it as an opportunity to take the price line above the 30-month threshold.
The break in line created buying pressure, which helped take the price momentum forward as the $SAND token closed at a strong bullish point.
At the same time as the price increased, traders jumped in to pay premiums to ensure the price remained on a higher end for a longer period, further fueling another cycle of a virtuous buying cycle.
Here are a few other reasons attributed to $SAND’s price increase;
- Rising Open Interest (OI) of Sandbox: Open Interest (OI) refers to unsettled outstanding futures contracts, indicating the amount of money in the futures market. A rising IO indicates more traders are entering the market.
Data shows that futures OI in SAND has increased four times from $53.1 million to $222.1 million, representing the highest figure since April 2022. The rising OI is another indicator of heightened speculative activity and shows how traders are betting on SAND’s future price movements as they are expecting a further price increase in the crypto coin, creating upward pressure on the spot price.
When looking at it from a broader perspective, the rising OI in SAND shows increased investor confidence in the Sandbox ecosystem. Plus, it shows the market sentiment is steering toward gaming and metaverse projects, while SAND might be among the top projects in the space.
- Positive Exchange Flow Balance: Exchange flow balance represents the net movement of a cryptocurrency going in and out of exchanges. To determine the rate, the amount of tokens going into the exchanges and the ones coming are subtracted, which shows whether the token is being sold or held by the community.
What’s happening in the case of $SAND is that the exchange flow balance dipped sharply from 3.97 million on Thursday to -15.27 million on Sunday. This shows a dramatic shift in investor behavior, and this decline has also led to a 2.5% drop in the $SAND token exchange supply.
As fewer tokens leave exchanges, fewer SAND tokens will be available for sale, reducing the token supply and increasing prices. The low selling pressure is often associated with a strong holder confidence, which in itself is reason enough to drive the price higher.
- Recent Surge in Trader’s Interest and Liquidity in $SAND: $SAND’s trading volume in the third week of November was near $122 million, and in the next week only, it spiked to $5.41 billion. A massive increase in a matter of days, which is also the highest recorded spike since October 2021, touching 98%.
Once again, the surge in trading volume suggests a renewed enthusiasm for $SAND, which the revival of GameFi and Metaverse may drive. Moreover, the high trading volume also shows that many community members are actively engaging with the $SAND token.
The last time $SAND saw a similar trend, it followed a major price rally. So, with history repeating itself, this can mean an upward momentum in the next few days and weeks, driving up the price even further.
$SAND Price Increase Fueled Sandbox’s Secondary Market, LAND
$SAND price increase has influenced activity in the LAND ecosystem. This has created a feedback loop system where the price rise has fueled an increase in LAND value, which, in turn, reinforces the increase in the token’s value.
- As the $SAND price increased, it impacted the secondary market of LAND as the floor price increased by 50%, showing an increased demand for the asset. Moreover, as data shows, there’s a 33% increase in sales volumes, further suggesting more users are trading LAND in the Sandbox ecosystem, driven with the bullish $SAND trend. This has also impacted LAND’s average trading price, bringing it to 0.15 ETH, which shows the growing community interest in the asset.
- Another trend that has emerged here is the difference in price increase between $SAND and LAND floor prices in the secondary market. With the price surge, per LAND’s $SAND price is 1011, which is 30% cheaper than the primary sales. So, this clearly created an arbitrage opportunity for the buyers. As less LAND is now available for sale, owing to the higher price, it has led to the scarcity of LAND, intensifying the competition and driving demand.
With the LAND’s demand driven by a price decrease, more investors are looking to invest in $SAND. LAND ownership does not only bring profits but also provides access to an exclusive community and the benefits that come along.
This shows the relationship between $SAND and LAND, which creates a virtuous cycle for the holders. With the increase in $SAND’s price, LAND markets gain momentum, which reinforces investor confidence, driving the demand for $SAND and, in turn, its price.
Will $SAND Continue to Sustain its High Price?
$SAND’s recent surge is impressive, but can it sustain the current price or even rally ahead? The analysis above shows the price increase, to a great extent, was due to the sudden breakthrough in the 30-month-old descending trendline. This breakthrough created a bullish momentum, which can be easily broken.
Some reasons include the low trading volumes, which raise concerns about the momentum’s strength. Moreover, suppose the majority of traders decide to take profits by selling their shares for any reason. In that case, it may create a chain reaction of declining prices, effectively breaking the resistance, which is essential for $SAND to move upward.
