How The Sandbox (SAND) price will react to the $133 million token unlock
Date: 2023-08-07 Author: Karina Ziganova Categories: CRYPTO PAYMENTS
The next unlock of The Sandbox tokens is scheduled for August 14th. During the event, 332.55 million SAND worth about $133 million will be released to the market. Historical data shows that the market reaction could threaten the stability of the asset's price.
According to TokenUnlocks, the unlock will increase The Sandbox's circulating supply by 332.55 million tokens. The last unlock, which happened on February 14, released 372.57 million SAND. Thus, the total inflation for 2023 will be 705 million coins.
Growth of The Sandbox network has slowed significantly
One of the biggest factors that could potentially mitigate the impact of a major token unlock is network growth. However, Santiment data shows that this is not the case for The Sandbox. The chart below shows that the yearly peak of 1,899 new addresses occurred on January 15th. This value is 76% lower than the 2022 peak of 7885 new addresses recorded on February 23rd.
Mass unlocking of tokens during a period of declining network growth could trigger strong selling pressure. Thus, strategic investors can go short and influence the price of SAND even more.
Long term holders get rid of SAND
On-chain data from IntoTheBlock shows that 66.6% of SAND holders are experiencing losses. Despite this, the whales are actively dumping tokens to get ahead of the price drop after the unlock.
It is noteworthy that addresses with a balance of 1 million to 10 million coins started selling SAND around July 13, that is, exactly one month before the next unlock.
As of July 13, their total holdings were 284.3 million tokens. However, at the moment they have decreased to 252.2 million coins. This means that in less than three weeks, the whales sold around 30 million SANDs worth about $12 million.
The chart above shows that the actions of this group of investors are closely correlated with the price action of The Sandbox. Pressure from them could greatly affect the price of SAND in the coming days.
The Sandbox Price Prediction: Bears Target $0.30
Considering the above factors, it will only be a matter of time before The Sandbox's price drops. The 1,250 addresses that bought 2.6 million tokens at an average price of $0.37 would provide some support to the asset. But a massive SAND unlock could frustrate their efforts and send them down to $0.30.
The bulls, in turn, will try to gather their strength and start a rally towards $0.45. However, 1,400 wallets will stand in their way, which purchased 55.2 million SAND at an average price of $0.42.
