The blockchain-based metaverse platform The Sandbox (SAND) provided users the ability to create, own, and monetize digital assets. SAND recorded a price increase of 60% in January, even amid the broader market correction and a return of fear sentiment.
The following article discusses the factors indicating opportunities and risks for SAND traders in January.
What is driving SAND's price in January?
The Sandbox (SAND) rose above $0.17, climbing more than 60% since the beginning of the year. Its upward momentum closely resembles the recent rise seen in Axie Infinity (AXS).
Data showed that traders on Upbit were among the main forces behind this rise.
The trading volume of SAND on Upbit accounted for over 23% of the total volume. Prices on Upbit also traded at a premium compared to other exchanges. AXS experienced a similar impact driven by Upbit, which raised its price to more than three times in January.
It seems that Korean investors are showing renewed interest in the gaming sector. Artemis data indicated that the gaming sector has outperformed the overall market since the beginning of the year.
As capital continues to flow into this sector and dynamics resemble AXS, SAND could extend its rise further. Compared to AXS gains exceeding 200%, SAND's performance still appears relatively modest.
Analysts expect SAND to surpass the resistance area at $0.20. Some forecasts indicate a move towards $1 if interest in GameFi continues to grow.
What risks should traders be aware of?
Although price movement has not yet shown clear signs of exhaustion, several concerning signals have emerged.
CryptoQuant data shows that SAND reserves on centralized exchanges have reached a one-year high. Participants currently hold nearly 1 billion SAND on the platforms, representing over 33% of the total supply.
An increase in reserves on exchanges often indicates a higher risk of price drops, as selling tokens becomes easier in the open market. This dynamic threatens the current upward trend. It suggests that a breakout for SAND could turn into a trap if there are not enough new capital flows to absorb selling pressure.
In this context, the institutional report from Altcoin Vector for Swissblock indicates that the narrative around the metaverse and gaming – which was considered dead – is starting to return. However, it appears that the recovery relies more on speculation rather than sustainable growth.
The Altcoin Quadrant from Altcoin Vector shows that most altcoins are still in the "accumulation" phase. In contrast, metaverse assets like AXS and SAND have jumped directly into the "scalp" zone, a rare exceptional state.
Altcoin Vector concluded that the narrative around META should be leveraged but with caution, and that for the long-term rise to continue, growth must stem from infrastructure and real adoption, not just narrative. It emphasized that without a solid base in the underlying assets, it will remain mere speculation.
The report also clarifies that small market cap tokens often lead market performance when fast capital seeks short-term profits. Sustained growth requires actual infrastructure development, real adoption, and broader recovery led by Bitcoin and Ethereum.
