The FED’s continuous strategy to curb inflation

The Sandbox is a community-driven platform built on the Ethereum blockchain, which supports a decentralized virtual gaming world. It allows users to explore, purchase, and create structures for monetization, while also tracking ownership of virtual LAND and non-fungible tokens (NFTs) within its application.

SAND is the native token of the Sandbox platform, enabling various transactions within its ecosystem, including purchasing LAND, interacting with user-generated content, and staking to participate in the governance of the decentralized autonomous organization (DAO). While SAND has seen an uptick in the current trading week, traders should keep in mind that the risk of further decline still looms. The U.S. Federal Reserve has indicated that additional rate hikes are expected, with projections showing the policy rate rising to 4.40% by year-end, and potentially peaking at 4.60% in 2023.

Although these rate hikes are aimed at controlling inflation, investors are concerned that an aggressive stance could push the economy into a recession. Risk-sensitive assets like stocks and cryptocurrencies tend to suffer under such conditions, and it’s important to note that the Federal Reserve’s tightening monetary policy has already significantly impacted such assets, including cryptocurrencies.

Fund manager Peter Schiff emphasized that a lack of institutional support and stringent monetary policies are key factors that will likely sustain the bear market for the foreseeable future, given the current macroeconomic conditions. Some positive developments occurred this week, as the Reserve Bank of Australia surprised financial markets by raising interest rates by 25 basis points, below the anticipated 50 basis points, marking a shift from its ultra-aggressive monetary stance.

This smaller-than-expected rate hike from the Australian central bank sparked hopes that the U.S. Federal Reserve might adopt a more tempered approach to its rate increases. Anthony Saglimbene, chief market strategist at Ameriprise Financial, noted: “There’s hope that the Federal Reserve might slow down the pace of rate hikes in the fourth quarter. While they might not stop entirely, it is encouraging to think that they may slow the rate hikes.”

However, the positive sentiment was short-lived. San Francisco Fed President Mary Daly reiterated that inflation remains a significant issue, prompting the U.S. Federal Reserve to raise interest rates into restrictive territory. The Fed is expected to implement a fourth consecutive 75-basis-point rate hike when policymakers convene in early November, which limits the potential for a significant increase in the price of SAND during Q4.

SAND Technical Overview

Since October 03, 2022, the price of Sandbox (SAND) has risen from $0.80 to $0.87, with the current price at $0.85. Despite this recent increase, traders should be aware that the risk of further declines still exists, especially in light of recent comments from San Francisco Fed President Mary Daly.

In the chart below, we can see that SAND has fluctuated between $0.75 and $1.50 in recent months. As long as the price remains below $2, no trend reversal can be confirmed, and the price of SAND remains in the SELL-ZONE.

Critical support & resistance levels for SAND

In this chart, starting from March 2022, I’ve highlighted key support and resistance levels that can aid traders in understanding potential price movements. Although SAND remains under pressure, if the price rises above $1, the next resistance target could be at $1.50. The current support level stands at $0.70, and a break below this level would signal a “SELL” signal, opening the path to $0.60. Should the price drop below $0.50, a strong support level, the next potential target could be $0.40.

Factors Supporting a Price Increase for SAND

The past few months have been challenging for the cryptocurrency market, as cryptocurrencies have experienced significant selling pressure due to hawkish central bank policies and the uncertainty surrounding the Ukraine crisis.

While SAND remains under pressure, if its price moves above $1, the next target would likely be resistance at $1.50. Traders should also remember that SAND’s price tends to correlate with Bitcoin’s price, and if Bitcoin’s value surpasses $22,000, we could see SAND trading at higher levels.

Factors Suggesting Further Decline for SAND

Economists have raised concerns that a global recession might be on the horizon, and the consensus is that the price of SAND could fall further. San Francisco Fed President Mary Daly reiterated that inflation remains a significant issue, necessitating rate hikes to restrictive levels. The Federal Reserve is expected to implement another 75-basis-point rate hike in early November, which may limit SAND’s potential upside in Q4.

Although the price has stabilized above the $0.70 support level, a breakdown below this threshold could signal a much more significant decline than what was observed in September. Additionally, SAND’s price is often linked to Bitcoin’s price, and when Bitcoin experiences a downturn, it generally has a negative effect on SAND’s value.

SAND Price Predictions from Experts

The outlook for Sandbox (SAND) in the fourth quarter of 2022 appears challenging, with limited risk appetite in the near term. San Francisco Fed President Mary Daly’s warning about inflation suggests the U.S. Federal Reserve will raise rates into restrictive territory, which is not favorable for SAND. According to fund manager Peter Schiff, the bear market is likely to persist due to a lack of institutional support and the continuation of tight monetary policies.