Cryptic ball: playing in the sandbox.
Since Facebook's mutation into Meta, several metaverse projects have been riding the hype. I've talked here about MANA, Decentraland's token, but I've missed covering SAND, from The Sandbox - another blockchain-based virtual world, a little bit like if Second Life was combined with Minecraft. SAND, now a top 40 token according to CoinMarketCap, has appreciated 8x in the past month and is the talk of the past days, after almost doubling since Monday.
All this is fine and normal in crypto, but there's something most people are missing. The hype levels reached in recent times are sucking liquidity out of the rest of the market. As you can see below, in a chart fetched by the popular trader Hsaka, SAND and MANA now account for almost as much volume as BTC and ETH together. This wasn't the case in previous bull markets, where BTC and ETH represented more than half of the volume, even during alt seasons.
This shifts the focus of attention of many traders towards the latest shiny thing, paralysing the rest of the market until a new trend emerges. This new trend can be another crypto sector, say meme coins, or a market structure change led by bitcoin or ether, which remain very influential in what sentiment is concerned. That's why I regularly cover these two leading coins, but remember there's a whole market out there - much more risky, but also with potentially higher rewards. Just make sure you are early into a trend instead of buying its top, and no FOMO!
Meanwhile, there's much confusion regarding India's latest crypto ban. What is being reported in the media is a ban on the use of "private cryptocurrencies" as legal tender, to be proposed to the parliament next week. This was already being discussed since February and, although a lot needs to be defined and clarified, it seems that provisions regarding investment and trading will be softer. But let's wait for more developments before assuming India is out of the cryptoshere.
Chart art: watch the quicksands.
Three things: sand gets everywhere.
- All you need to know about the Terra stablecoin.
- A great, visual analysis of past bitcoin tops.
- A good guide to the multi-chain future.