The Sandbox (SAND) Defies Bitcoin (BTC) Slide
Price weakness on the cryptocurrency markets continued for another day, with Bitcoin (BTC) abandoning previously solid positions. BTC dipped to the $55,700 range before a slight recovery, to trade at $56,529.04. BTC is now headed for one of the worst weeks compared to its recent rallies. Over the course of the day, price pressure pushed BTC below $56,000, creating the need to re-estimate potential price moves and a local price bottom.
Altcoins, however, had a logic of their own. The Sandbox (SAND) took off as one of the best-traded assets on the Binance exchange, ahead of its upcoming alpha launch. The Sandbox game aims to become one of the hottest spots in a crypto-powered metaverse. Binance is one of the important owners of digital land plots on the game, with the potential to build its own worlds and sub-games.
SAND Outperformed Weakening Altcoins
SAND, along with Decentraland (MANA) actually managed to outperform as the tides turned for most altcoins.
SAND hovered around $4.03 on Friday, after touching a peak above $4.31 late on Thursday. The asset recently saw peak volumes that sent the price to a new range, turning it into one of the significant winners of 2021. SAND started the year at around $0.04.
MANA retreated under $4, still retaining some of the earnings after touching $4.13. The project is similar in its business model to create digital land plots, though Decentraland is the older ecosystem.
During the latest price hike, MANA was the third most active asset on the Binance international exchange, closely tracked by SAND activity. Both assets have relatively high liquidity scores, with 805 points for MANA and 763 points for SAND.
What Triggered the BTC Price Drop
Outside a few niche assets, BTC dragged down the entire market on a mix of concerns. The immediate reason for the price drop were liquidations of leveraged positions, easily affected with an increase in volatility.
But perhaps the biggest concern is the looming liquidation of Mt. Gox coins. In the past, redress for those that kept coins on the exchange included selling the coins and returning fiat. Now, around 141,000 BTC may be released by the Mt. Gox trustee to former owners that manage to register as hurt by the Mt. Gox crash in 2013.
Some fear the coins may quickly enter the market and depress the BTC price. The Mt. Gox owners will also be eligible to receive Bitcoin Cash (BCH) and potentially, other forks that happened since 2013, depending on the distribution efforts of the Trustee.
The size of the Mt. Gox portfolio rivals the wallets of some of the biggest exchanges and staking projects. In total, the Tokyo-based exchange may have led to the loss of 850,000 BTC.
There is still no data of distribution from the known Mt. Gox exchange cold wallets. The addresses will be closely tracked for signs of distribution to some of the earliest BTC traders. In the current market, demand for actual physical BTC is high. The current availability of BTC on centralized exchanges is about $2.4M, with significant signs of holding onto the physical coins.
The specific pressures on BTC also allow altcoins to move in their own trajectories, especially true for specific projects that are building up their user base now.
The Sandbox Prepares for Alpha Release
The Sandbox game is still incomplete, despite the hype surrounding its token. SAND can now be staked for liquidity pairs on Uniswap to receive rewards. The token can also be spent for digital goods.
However, the presented NFTs and digital land plots are still not usable within the game, and are being bought as an early investment. The Sandbox Alpha release is scheduled for November 29, and may continue to push the price.
SAND is only the start of a trend for a new class of tokens, classified as metaverse tokens or play-to-earn tokens. Multiple assets fit the definition, but may hold significant risk due to liquidity specifics.
Despite the token hype, the completion of games may be far ahead in the future for some of the projects. The recent price setback affected multiple assets, but the overall performance of play to earn tokens remains robust. The sector now has a notional market capitalization above $31B, with growth tokens decoupling from the overall market moves.
The recent independent altcoin rallies show some assets have a different trajectory from BTC. Additional sources of liquidity such as Uniswap pairs or Binance pairs with Binance USD (BUSD) serve to offset the risk.
Outliers still surviving with relatively small losses include Avalanche (AVAX) still trading above $101. Solana (SOL) is currently dipping under $200, after completing a rally to the $290 range.
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