SAND investors have been exiting since January; has anything changed?
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
Bitcoin Dominance took a huge leap earlier this month as it soared from 41.5% on 10 May to touch 45.47% on 19 May. This surge meant that Bitcoin’s share of the total market capitalization of the crypto-market rose by a huge amount, even though the price per Bitcoin remained around the same – Around $29k. Therefore, altcoins are shedding value much faster than Bitcoin, and long-term investors would be wise to remain cautious of the movement of this metric.
For The Sandbox, a buying opportunity for long-term horizon investors is not yet present. The trend, in fact, remained overwhelmingly bearish at press time.
SAND- 12 Hour Chart
The $4.4, $3.6, and $2.65-zones have been critical support levels over the past three months. The price has broken beneath each of them, and at press time, SAND was trading at $1.28. These levels had acted as strong resistance when SAND pushed north in October and November last year.
The next stronghold of the buyers lay around the $1-area, with $1.08 marked as a support level on the charts. However, the series of lower highs and lower lows over the past few months suggested that buyers run a high risk of large losses if they attempt to DCA into a steady downtrend.
Instead, long-term investors might want to wait for signs of strength from buyers before allocating some capital towards the crypto-asset.
The price formed a hidden bearish divergence with the momentum indicator, RSI. The price formed lower highs (white) while the RSI made higher highs. This bearish divergence suggested a continuation of the downtrend, and therefore, the price could move toward the $1-mark in the days or weeks to come.
The RSI has been beneath the neutral 50 line since the start of April, which highlighted the bearish trend of SAND. The Stochastic RSI also formed a bearish crossover, adding a bit more confluence to the bearish bias.
The OBV did pick up slightly over the past week as it formed higher lows, but the buying volume is dwarfed by the selling volume of the past few weeks. Alongside the same, the CMF has also been below the -0.05 mark over the past six weeks. This meant that significant capital flow was directed out of the markets, highlighting selling pressure.
The indicators aligned to show seller strength in recent weeks, and the prospects don’t look great for a bullish reversal. Buyers would want to wait for market sentiment to shift, while short-sellers would be interested in SAND’s reaction at the $1.19 and $1.53-levels, as well as a breakdown under the psychological $1-support.