Sandbox stares at 30% SAND price drop ahead of token unlock

Key Takeaways:

• Sandbox coin pares the 140% gains.
• The technical indicators see a 30% decline before a rally.
• Approaching token unlock backs the short-term bearish prediction.

YEREVAN (CoinChapter.com) – SAND token, the in-house coin of Play-to-Earn platform Sandbox, entirely pared its 140% year-to-date gains on Aug 8. Meanwhile, it eyes a further 30% drop due to a technical setup called the “falling wedge.”

SAND coin price action in a falling wedge

The falling wedge features two converging trendlines that envelop the price action, gradually lowering the price swing. SAND coin price retested the resistance line repeatedly since Feb 2023. Thus, if the formation remains relevant, a likely drop to the support line at $0.28 is in the books, meaning a 30% decline in two weeks.

Notably, the falling wedge is a bullish reversal formation. It forecasts an increase equal to the maximal wedge height in case the underlying token breaches the resistance. However, SAND bulls must double down to achieve such a push amid the overall crypto sector stall and an upcoming token unlock event.

Sandbox token unlock approaching

According to data from TokenUnlocks.App, Sandbox will increase its circulating supply by another 332 million SAND coins on Aug 14. The previous unlock event occurred on Feb 14, 2023, injecting 372 million coins.

Five days before the unlock, the total percentage of unlocked coins now stands at 68% or just over 2 billion coins. Notably, both events bring the total inflation rate for this year to 705 million tokens, intensifying bearish expectations.

In detail, token unlocks inject a large number of coins into circulation and, in so doing, sharply increase the supply while the demand stays the same. Due to the imbalance, the price typically drops, at least in the short term.

However, on-chain metrics agree with the long-term bullish technicals.

According to on-chain data tracker Santiment, Sandbox developers have been active despite the SAND coin price decline.

Additionally, Sandbox lost 25,000 holders in mid-June but recovered 10,000 of them since. The overall growth has been steady since 2021, backing long-term bullish expectations.