Should You Buy Sandbox (SAND) Crypto After Its 290% Spike in November

NOIDA (CoinChapter.com)—The Sandbox (SAND) crypto token has had quite a happening month so far, with the token up by over 290% at one point. Such massive price movements tend to increase the hype surrounding the asset, attracting more buyers to the market.

However, a massive price spike not backed by tangible bullish cues could become a bull trap for traders.

Bulls Might Be Out Of Fuel

SAND’s recent 250% surge largely depends on speculative activity and market-wide bullish sentiment rather than updates from The Sandbox ecosystem. On-chain data reveals a sharp increase in open interest, which crossed $250 million, signaling heightened speculative trading.

The funding rates also flipped positive during this rally, indicating traders were willing to pay premiums to maintain long positions, further driving the price upward. However, the absence of a specific catalyst behind the rally could be worrying for its sustainability.

With the rally cooling off, the open interest in SAND futures has started retreating, shedding over $23 million in just 24 hours.

While metaverse tokens like SAND have benefited from renewed interest in virtual assets, the rally appears heavily influenced by profit-seeking traders cycling gains from broader crypto market surges, especially Bitcoin’s rally above $98,000.

Furthermore, the current market dynamics suggest that profit booking has already started. SAND bulls might find it difficult to sustain the token’s momentum without a substantial development, such as a new partnership, ecosystem upgrade, or major institutional backing.

Speculative rallies fueled by open interest spikes often face steep corrections when traders close their positions en masse, leading to a rapid price drop.

The resurging interest in the NFT sector could help the Sandbox token, but it might not be enough to warrant bullishness about SAND price action.

SAND Price Falls Victim To Profit Booking

Meanwhile, the SAND USD pair fell victim to profit booking, with the rally down by over 23% from Nov 25’s high of $0.867 to reach a low near $0.663 on Nov. 26. With nothing to sustain the rally, the Sandbox crypto seems to have fallen victim to the bears’ profit booking.

SAND prices did a massive 80% rally on Nov. 24, likely putting traders who bought the token even in November in the green. As a result, market participants started to book profits aggressively.

Moreover, SAND token failed to reach the projected price target from its falling wedge (better visible on HTF charts) pattern breakout. A rejection near the 0.5 FIB level has sent the token careening toward the 0.382 FIB support near $0.645.

Breaching the immediate support level could force the Sandbox token to test the support near $0.48.

Conversely, if SAND restarts its rally, it would need to flip the 0.5 FIB levels near $0.7 with good volumes to establish an authoritative bullish narrative and then move to the resistance near $0.91.

Conquering the resistance at the 0.618 FIB level could help SAND price target the resistance near $1, a price mark the token last touched in Aug. 2022, making a key psychological level.

The RSI for SAND remained overbought, with a score near 74.42.

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