Adding LOOKS to your portfolio? Here’s why you should think twice

LooksRare catapulted to fame because the rival NFT market treading on OpenSea’s toes. Whereas critics have taken purpose at it for the quantity of wash buying and selling it permits, LooksRare has one thing that OpenSea customers have been wanting for a really very long time: a local token.

Seems like a catch

You is likely to be tempted to disregard the LOOKS token for those who aren’t an NFT collector or into metaverse belongings, however an evaluation by Santiment famous that LOOKS might need extra to supply than. . .nicely, simply appears to be like and glamor.

Santiment identified LOOKS’ greater than 175% rally since mid-March and noted,

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“We’re additionally seeing enormous quantity coming on this week, which noticed value pushing increased (trying wholesome to date). What we don’t need to see is a a divergence of value and quantity (increased value with low quantity).”

Certainly, commerce volumes have been spiking since 26 March, simply as LOOKS rallied. Nonetheless, the change provide has been largely transferring sideways and isn’t too removed from the place it was in early February. This seems to counsel that whereas LOOKS is seeing attention-grabbing traits, these should not triggering vital modifications in investor exercise. Weighted sentiment, which was barely damaging at press time, additionally appeared to agree with this.

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Supply: Santiment

In the meantime, a have a look at the Relative Energy Index [RSI] tells us that LOOKS briefly crossed into the overbought territory, indicating that traders had been overvaluing the asset. Nonetheless, at press time, it was beneath the 70.00 line. That being stated, the indicator is on an upward development.

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Supply: TradingView

For extra context, it’s a good suggestion to research the efficiency of the LooksRare NFT market in March 2022. Day by day volumes have been steadily falling since February 2022 and by the top of March, OpenSea and LooksRare had been seeing related day by day volumes. This is likely to be one issue that would dissuade traders from including LOOKS to their portfolio – even when it’s doing nicely.

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Supply: Dune Analytics

Airing soiled laundry?

LooksRare has been dismissed because of its large volumes of wash buying and selling that helped it eclipse OpenSea’s personal stats earlier this 12 months. Nonetheless, soiled laundry apart, Coinbase’s evaluation of the asset in February revealed,

“…the remaining reliable NFT quantity remains to be greater than what NFT marketplaces Rarible, SuperRare, Basis, Makersplace, and Aysnc did in all of 2021 combined.”

For that cause alone, traders could be well-advised to control LOOKS to see if it’s going to proceed to rise – or fall onerous.

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