On-chain data shows The Sandbox whales have made large deposits to exchanges as 332 million tokens of the asset have become unlocked.
The Sandbox Exchange Inflow Has Registered A Large Spike Recently
Today was The Sandbox’s token unlock day, meaning that a particular portion of the cryptocurrency’s supply that had been locked until now has just been released into circulation.
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According to TokenUnlocks, about 332.55 million SAND (worth about $131 million) was successfully unlocked with this latest event, representing 16.66% of the total circulating supply before the unlock.
This is a significant amount that can cause visible changes in the market. Due to basic supply-demand principles, the supply suddenly going up by this huge value can create an imbalance if appropriate demand for the coin also doesn’t crop up at the same time.
Thus, it’s possible that this event could lead to a bearish domino effect for the asset. And it seems that the whales have been aware of this, as the head of research at CryptoQuant, Julio Moreno, has revealed in a post on X.
Looks like the value of the metric has been pretty high in recent days | Source: Julio Moreno on X
The relevant indicator here is the “exchange inflow,” which keeps track of the total amount of any given asset (which, in the current case, is SAND) being transferred to the wallets of all centralized exchanges.
When this metric has a large value, the investors are currently depositing a huge number of coins to these platforms. Generally, one of the main aims behind transactions to these platforms is for selling-related purposes, so the indicator registering such values can have bearish implications for the price.
On the other hand, the inflow’s calm value can imply that there isn’t much extra selling pressure in the market, which can provide ideal conditions for the cryptocurrency’s value to climb.
The above chart shows that the exchange inflow for The Sandbox registered a huge spike yesterday, implying that the investors had made some sizeable deposits to exchanges.
The timing of these inflows may imply that they were made in preparation for today’s SAND token unlock, as the whales may have wanted to sell before any bearish effect appeared due to the unlock.
So far, however, The Sandbox hasn’t noted any significant decline, whether from these inflows or the unlock event. It’s possible that the whales who made the exchange deposits haven’t pulled the trigger on their selling yet, in which case, any bearish effect would only appear once they do so.
The chart shows that an exchange inflow spike of a similar scale also appeared in February, which coincided with the coin’s local top. Back then, the bearish effect only occurred with a delay, showcasing how a similar scenario could also play out this time.
At the time of writing, The Sandbox is trading around $0.39, down 2% in the last week.
The coin hasn't seen any major decline during the past day | Source: SANDUSD on TradingView
Featured image from Thomas Lipke on Unsplash.com, charts from TradingView.com, CryptoQuant.com