Following optimistic developments, The Sandbox (SAND) reached a new high of the year, reaching $0.86 in early Asian trading on Monday. However, the price has since corrected downwards. 14%, currently trading at $0.76 at the time of writing.
Despite the recent price surge, technical and on-chain indicators suggest that the long-awaited target of $1 is not yet feasible. Here’s why.
The Sandbox’s Long-Term Investors Profit
SAND price increases over the past week have prompted long-term investors to move their previously dormant tokens. This is reflected in an increase in the Token longevity index, which measures the movement of long-held coins. According to Santiment, the index exploded to a two-month high of 33.19 billion on Sunday.
The index’s prominence is notable, because long-term investors are not in the habit of moving their currencies. So when they make this move, especially during a bullish period, it suggests a shift in market trend. Significant spikes in life expectancy during bullish periods like this suggest that long-term investors are selling, which could lead to increased selling pressure.
Notably, the increase in SAND Flow Balance on the exchange over the past 24 hours confirms the selling activity. According to Santiment, this index, which measures the difference between the amount of assets deposited into the exchange and the amount withdrawn during a specific period, has increased by 162%.
This reflects an increase in the amount of SAND tokens deposited into the exchange. It signifies that investors are preparing to sell, potentially leading to downward pressure on prices.
On the daily chart, SAND’s Relative Strength Index (RSI) stands at 87.18, indicating overbought conditions. RSI measures whether an asset is oversold, with a range from 0 to 100. Values above 70 signal the asset is overbought and could decline, while values below 30 indicate it is oversold and could recover.
With RSI at 87.18, SAND is hinting at overbought conditions, creating the risk of a short-term correction. If the price declines, it could fall to $0.72. Increased selling pressure at this level could push SAND further down to 0.61 USD, further away from the set target of 1 USD.
Conversely, the SAND Token price could recover its yearly high to $0.86 if selling pressure subsides. This would negate the discount hypothesis mentioned above.