The Sandbox (SAND) is on the cusp of recovering the $0.40 level, just a day after a swift shift in market momentum pushed it down to $0.36. Recent on-chain data and significant movements in derivative markets offer insights into the potential future price movements of SAND.
Following Changpeng Zhao’s departure from Binance, SAND witnessed an 8% rebound on Thursday, rebounding from a weekly low of $0.36. The response of Sandbox traders to the market’s volatility could influence the price action in the coming day.
related: Bitcoin Exchange Inflow Surges: $1.16 Billion Rise Signals Market Pause or Renewed Confidence?
Bullish traders, facing substantial liquidations, opted to cover their positions in the aftermath of the leadership changes at Binance. Coinglass, a derivatives market tracker, reported that $8 million worth of SAND futures contracts were closed during the market downturn on Wednesday. Despite this, the open interest chart reveals that within 24 hours, the SAND derivatives market experienced a rebound, with $4 million in capital inflows. The capital stock of SAND futures markets, which had dipped to $36.4 million, is now back above $40.4 million at the time of this update on November 23.
The increase in open interest, especially after a period of significant long liquidations, is often considered a bullish sign. This suggests that existing long traders are reinforcing their positions, anticipating a swift bullish reversal. Such an uptick in open interest, following a sharp price decline, may indicate a shift in market sentiment, with traders entering new positions believing that the market has found support or that previous selling pressure was excessive.
The recent 8% rebound in the SAND price supports this perspective. If open interest continues to rise, it is likely that the SAND price will maintain its current upward trajectory.
In response to SAND’s decline to $0.36 on Wednesday, the top holders within the Sandbox ecosystem stepped in to buy the dip, preventing a breach of the crucial $0.35 support level. On-chain data from Santiment reveals that the top 20 investors in the Sandbox’s metaverse ecosystem increased their holdings from 2.39 billion to 2.40 billion SAND between November 15 and November 20. Since the market downturn on November 21, they have added another 10 million SAND to their balances, approximately $4 million at the current SAND price of $0.36.
The increase in the supply held by top addresses is generally considered a bullish signal, indicating that major investors remain confident in the project’s fundamentals. This influx of liquidity from Sandbox whales has allowed panic sellers to execute exit trades without causing a significant price dip.
From an on-chain perspective, the rising demand from whales and increased capital inflows in the derivatives markets position SAND for a sustained recovery. Global In/Out of the Money (GIOM) data, which categorizes current SAND investors based on their entry prices, supports this bullish outlook.
While the data suggests a positive trajectory, it highlights the need for bulls to overcome initial resistance at $0.45 for a potential parabolic breakout. Failure to breach this level could lead to a correction, as 22,810 addresses hold 100.5 million SAND at an average price of $0.45.
Conversely, if the SAND price falls below $0.35, the bears could gain control. However, initial support may come from the 13,330 addresses that bought 953.2 million SAND at the maximum price of $0.37. If these investors cover their positions, it could prevent a significant downturn in the SAND price.