Market Dynamics in the Metaverse Segment

According to Santiment, there are a number of important factors in the Metaverse segment that may largely affect prices and capitalization changes of MANA, SAND, AXS, ENJ in the following weeks. In particular, the correlation between Metaverse tokens is comparatively low as various projects demonstrate very different market dynamics.

For instance, the 24-hour market results indicate the appreciation of Decentraland, Enjin Coin, and WEMIX as well as the depreciation of the Sandbox, Axie Infinity, Immutable X, and Illuvium. This fact illustrates that the overall scope of the Metaverse segment is comparatively stable at the moment, and investors shift their funds among the main projects at the expectation of selecting the most profitable and less risky alternative.

From a longer 1-week perspective, only Decentraland has demonstrated the positive dynamics of its market price, contributing to its leadership position in the Metaverse sphere. The rapid increase in its price may indicate the beginning of a new bullish cycle in the following weeks. Most other tokens do not demonstrate the required potential to meet Decentraland’s rates of market growth. Even the Sandbox and Axie Infinity tend to lose their competitive positions in recent days.

Santiment’s analysts suggest that WEMIX may reach high rates of growth in the following weeks due to the rapid increase in its trading volume by more than 65%. At the moment, it has not resulted in a proportional increase in the token’s price. However, the situation may change in the near future as the time lag between volume and price changes is comparatively common for crypto projects.

Illuvium has also reached positive volume dynamics but it is still below 5%; therefore, its price and capitalization growth is limited. All top Metaverse projects show negative volume dynamics, indicating the high degree of investors’ uncertainty about the short-term changes in the segment. Decentraland’s volume decline is lower compared with the Sandbox and Axie Infinity, implying the stable demand for its token MANA even in the face of “crypto winter” or Metaverse projects’ price fluctuations.

Such a situation confirms the high likelihood of Decentraland’s rapid capitalization growth in the near future both as a result of the growing price of MANA and high trading volumes (at least in comparison with other major cryptocurrencies). Regarding potential investment implications, the largest proportion of Metaverse-directed resources should be allocated to MANA (due to its high returns and low risks) and the minor proportion may be allocated to WEMIX (due to its high growth potential). The investments in the Sandbox and Axie Infinity are not reasonable under the current market conditions.