Decentraland (MANA), The Sandbox (SAND), Axie Infinity (AXS), among others have risen more than 10,000% since the beginning of the year. But now, with the market downturn, analyst Akash Girimath, from FXStreet, points out that caution is needed.
The analyst focused one of his recent analyzes on SAND, and highlighted that the token had been stuck in a lateral movement between two vital levels for about a week.
This consolidation indicates that neither bulls nor bears are willing or able to move the SAND in any direction. Despite this, Girimath believes there is a greater chance of an inferior move due to the bearish setting.
“SAND’s price recovery after the December 4 crash was impressive. After all, the token has recovered 50% from its swinging low of $4.12. Then SAND stalled, with no momentum from the bull or bear fields. This resulted in a lateral movement between US$4.76 and US$5.64,” he said.
According to the analyst, during this consolidation, the price of SAND reached three equal highs around $5.64. As a consequence, this resulted in the triple top configuration.
“This technical formation suggests that bears will eventually take control and push prices down after three failed attempts by buyers to extend the rally,” he points out.
Also according to him, investors can go short in their current position. Or, they can wait for a bullish swing to form around $5.27.
“Although it is risky, there is a chance that the Sandbox price will break the $5.64 barrier, which would provide a much better chance of going short,” he says.
Girimath said regardless, a break below $4.76 will trigger an 18% drop to the December 4th low of $4.12. Then, another drop to $3.88.
In total, these declines would represent a devaluation of 25% from the current position of $5.13.
“On the other hand, if the Sandbox price produces a higher increase above $6.07, that will invalidate the thesis. Market participants can set their stop-loss just above this level. This development could push SAND even higher to retest the $6.75 resistance barrier,” he concluded.