The Sandbox (SAND) price broke out on January 1, soaring 100% to a high of $0.75 on January 15 before bears flocked to the market and spent the next three weeks to February 6 giving bulls a hard time. The three-week battle between bulls and bears stunted the SAND price to under $0.8.
On February 7, however, the SAND price exploded to a high of $0.93, a 31% surge within a single day. Nevertheless, the great climb did not go past the bears as they quickly recovered the metaverse token’s market on February 8 and spent the next week chopping off the gains that had been made thus far. However, on February 14, the bulls put their right foot forward and took the driver’s seat three days in a row to today, February 16.
At the time of writing, SAND was trading at $0.787 after gaining 15% in the last 24 hours. There has been massive trading activity for the metaverse token, soaring 78.61% in the previous 24 hours to $482.5 million, which has contributed to its bloating market cap, up 14.3% to $1.19 billion.
SAND Price Soars On Token Unlock Event
The recent bullish activity comes in the wake of a colossal token unlock event on February 14. The event saw 372.57 million SAND tokens released into the market, approximately $273 million, accounting for almost 12.4% of the token’s total supply.
Token unlocks define the process where tokens blocked under the terms of the project’s funding rounds or fundraising efforts are released. They are generally seen as bearish catalysts, leading to a supply increase and causing the asset’s value to drop. Ironically, in the case of SAND, the token unlock has had little effect on the price. The token still surges despite releasing around $273 million worth of SAND.
The purpose of the unlock event was to seed the ecosystem and was a strategic move as half of the 12.4% would go to investors, according to a report from Kaiko Research. Notably, the Sandbox has an unlock schedule, due every six months until 2025, with the same allocation of 12.4% going to investors.
According to Conor Ryder, a research analyst at Kaiko Research:
“The thing to watch with unlocks is [percentage] to investors: if [around] 50% expect heavy sell pressure.”
Where Is SAND Heading?
At the time of writing, SAND was trading at $0.787 as bulls confronted the immediate resistance from the $0.8 psychological level. The price was using the 200-day Simple Moving Average (SMA) at $0.77 for support after flipping it from the opposition. An increase in buying pressure from the current level could set the tone for the SAND price to continue building on the post-Valentine’s rally.
If the bulls manage to keep up the buying momentum, the SAND price could climb higher, with the first logical move being the 78.6% Fibonacci retracement at $0.929. Following this level, bulls would look at the 107% Fibonacci retracement at $1.127 next, or in highly ambitious cases, retest the 132% Fibonacci retracement at $1.301 last tested in August, around the same time The Sandbox held its previous token unlocks event.
SAND/USD Daily Chart
The positive outlook for the SAND price was supported by solid support downward due to the Simple Moving Averages (SMAs), starting with the immediate one provided by the 200-day SMA at $0.77, followed by the 50-day SMA and 100-day SMA at $0.655 and $0.601 respectively. These were possible breaking zones for bulls to refresh their buyer momentum.
Notice also that the 50-day SMA was moving upwards to show that more buyers were coming into the market. The Relative Strength Index (RSI) at 56 also showed that buyers were leading the market, bolstered by the price strength index, which had just called a buy signal that could end SAND price to greater heights.
The Moving Average Convergence Divergence (MACD) was also in the positive region above the mean line, further bolstering the bullish case.
On the downside, if investors decide to book profits, the Sandbox price could descend, losing the 200-day SMA before squatting further. This was likely, given the MACD histograms were losing their reddish feel and turning pink, a sign of buyers leaving the market.
In such a turn of events, the first sensible move for the metaverse token’s price would be to retest the 50% Fibonacci retracement at $0.729 or lower to the 23.6% Fibonacci retracement. In extreme cases, however, the price could go as low as retesting the $0.381 support floor from which it sprung on New Year’s Eve.
