The Sandbox: SAND presents a buying opportunity, but here’s the caveat

It’s hard to make sweeping statements about metaverse tokens, since each one is so different from the rest. While alts can sometimes match each other’s movements, it’s common to see one metaverse token thriving while another is struggling to stay over its support level.

However, one metaverse project was definitely deep in the red at press time.

Sanding the rough edges

Santiment’s ‘strong and oversold’ screener put The Sandbox [SAND] at the top of its list at press time. Why? Changing hands at $2.36 at the time of writing, SAND dropped by 7.18% in the last 24 hours and lost 14.82% of its value in the last week.

If you’re still not convinced, take a look at some price indicators. At press time, the Bollinger Bands were relatively closer together, which indicates a drop in volatility. However, the most recent candles were in contact with the lower band, which indicates an asset that traders might see as oversold.

Source: TradingView

Adding to that, the Relative Volatility Index [RVI] came in below 50, which signals that future volatility will likely take SAND’s price further downwards.

Just coasting along. . .

According to Santiment data, the 30-day MVRV ratio for SAND came in below zero, which showed that on average, SAND holders were seeing losses.

Source: Santiment

Furthermore, when looking at SAND volumes, we can see that the metaverse token’s hype period is long gone, as volumes have been steadily declining since late 2021. This can help explain why many are choosing to sell their assets.

Source: Santiment

However, don’t be so quick to brush the SAND off your hands. Prices and volumes are falling, yes, but so is SAND supply on exchanges. Are investors buying the continuing dip or are whales starting to accumulate the asset? It’s hard to tell at this point but if the speed picks up, it could help trigger a rally again.

Source: Santiment

That being said, a rally might not be so easy for SAND to achieve. In its report on The Sandbox, Messari pointed out that the project needed to do more in order to monetize its features – or risk losing investors.

The research firm noted,

“…83% of buyers choose to sell their LAND sooner than 3 months after the purchase. This hints towards profit taking as a driver for LAND owners to buy & sell their assets.”