The cryptocurrency market is no stranger to volatility, and The Sandbox’s upcoming token unlock event seems to be causing ripples of uncertainty. Scheduled for Monday, August 14th, the release of 332 million SAND tokens, valued at $133 million, represents more than 16% of the circulating supply. This move, while anticipated, has sent waves of caution through the market, as token unlocks typically introduce new liquidity that often tilts the balance towards bearish trends.
The impact of SAND’s token unlock might already be evident in its recent price trajectory. The digital asset has experienced a 5.4% drop in the monthly charts and a 5.9% decline over the past two weeks. The token’s journey has been predominantly bearish since February, with only a temporary glimmer of hope in mid-June before succumbing to another bout of negative sentiment in July.
Interestingly, this isn’t the first instance of SAND encountering a price slump ahead of a token unlock. A similar pattern was observed prior to the February token unlock event. Even more telling is the fact that last year’s August airdrop led to a substantial 20% price plunge within just six days following the unlock.
Currently hovering around the $0.45 mark, SAND faces resistance at this level, while enjoying some support at $0.38. A notable aspect is the lack of substantial trading volume around this price point, which sets the stage for potential volatility in the coming days.
Data from IntoTheBlock paints a picture of concern. Notably, large transactions involving SAND have decreased by 4.15%. Given that a significant 90% of SAND tokens are held by large wallets, this trend could serve as a warning signal. Moreover, a staggering 95% of SAND holders find themselves at a loss, while a mere 3% hold positions in profit.
Sandbox’s Proactive Measures: Navigating Token Unlock Impact
The project appears to be taking proactive measures to mitigate the potential shock. Recently, a movement of 60 million SAND tokens from the Sandbox Genesis contract indicated the early stages of the unlocking process. According to Uncle Grumpy, The Sandbox’s Discord Ambassador, this maneuver aims to ease the transition and prevent system-wide turbulence.
The allocation of unlocked tokens is worth analyzing. Half of the released tokens will be directed towards team and company reserves, with an additional $15 million worth of tokens allocated for The Sandbox’s advisors. The remaining tokens are slated for distribution among strategic and seed sales participants, allowing these groups to offload their positions for the first time.
As the countdown to The Sandbox’s token unlock continues, market participants remain on edge, mindful of historical patterns and the potential market impact. The coming days will undoubtedly shed light on whether this event will lead to a bearish extension or if the project’s strategic measures will aid in maintaining stability amidst potential turbulence.