LooksRare rose to fame as the rival NFT marketplace that tipped OpenSea on its toes. While critics have courted it for the volume of laundry it allows, LooksRare has something OpenSea users have long wanted: a native token.
Looks like a catch
You might be tempted to ignore the LOOKS token if you’re not an NFT collector or into metaverse assets, but an analysis by Santiment noted that LOOKS may have more to offer than . † .well, just looks and glamour.
$LOOKING peaked today at +175% since March #FOMC meeting. The supply on exchanges has been increasing over the past week, active deposits and withdrawals have both risen significantly and development activity seems to correlate with price. Read our latest insight! https://t.co/KncfPZoRr7 pic.twitter.com/wRQ3dQkuEV
— Santiment (@santimentfeed) March 31, 2022
Santiment pointed to LOOKS’ rally of over 175% since mid-March and noted†
“We also see huge volume coming in this week, pushing the price higher (which looks healthy so far). What we don’t want to see is a divergence of price and volume (higher price with low volume).”
Indeed, trading volumes have been rising since March 26, just as LOOKS soared. However, the stock supply is largely moving sideways and is not far from where it was in early February. This seems to indicate that while LOOKS sees interesting trends, they do not lead to significant changes in investor activity. Weighted sentiment, which was slightly negative at the time of going to press, also seemed to agree with this.
Meanwhile, a look at the Relative Strength Index [RSI] tells us that LOOKS briefly entered overbought territory, indicating that investors overvalued the asset. At press time, however, it was below the 70.00 rule. That said, the indicator is showing an upward trend.
For more context, it’s a good idea to examine the performance of the LooksRare NFT marketplace in March 2022. Daily volumes have been declining steadily since February 2022, and by the end of March, OpenSea and LooksRare were seeing similar daily volumes. This can be a factor that can deter investors from adding LOOKS to their portfolio, even when things are going well.
Airing dirty laundry?
LooksRare has been turned down thanks to the massive amounts of laundry trade that helped it eclipse OpenSea’s own stats earlier this year. Dirty laundry aside, Coinbase’s analysis of the asset in February revealed:
“… the remaining legitimate NFT volume is still more than what NFT marketplaces Rarible, SuperRare, Foundation, Makersplace and Aysnc did in all of 2021 together†
For that reason alone, investors would do well to keep an eye on LOOKS to see if it will continue to rise – or fall sharply.