Decentraland: MANA has reached resistance. Is it time to run out?


disclaimer: The following analysis results are the sole opinions of the authors and should not be construed as investment advice.

Decentraland is one of the largest metaverse projects in the crypto ecosystem, but the token MANA has been on a steady decline in recent weeks. After a brief erosion below the $0.72 support level, the price rebounded an impressive 80%. However, this rally could be nearing its end and the crypto asset could face a rejection in the resistance zone for the next day or two.

MANA- 1 hour chart

Source: MANA/USDT on TradingView

The $1.25-$1.35 zone (red box) is MANA’s higher supply-time supply zone, which acted as a demand zone earlier this month. Although MANA has had a huge rally over the past few days, the long-term market structure remains bearish.

The last time MANA traded below the $1.3 mark was in October 2021. The fact that sellers have been successful in pushing prices below this area shows that there is likely no easy path to a recovery in the coming weeks and cannot discount further declines in the coming weeks.

In the lower period, there is strong evidence that volume purchases drove MANA into the $1.3 zone. However, this did not represent a buying opportunity, but provided an opportunity to sell or sell the asset.

rationale

DecentralandL: MANA has reached the resistance zone.  How much time is left?

Source: MANA/USDT on TradingView

The MACD was well above the zero line and the MACD line (blue) was above the signal line (orange), indicating a strong buy signal. However, over the past 24 hours, the MACD has moved higher while the MACD has lowered its highs. This is a bearish divergence and its importance is reinforced as it occurred just below the supply area.

The DMI showed an ongoing strong bullish trend after gaining nearly 80% from the low of $0.7 a few days ago. Similarly, OBV also rose and broke the previous downtrend.

conclusion

The indicators showed strong bullish momentum and demand for MANA, but bearish divergence also suggested a retreat could occur. This withdrawal could see MANA retesting the $1 support level. Depending on the direction of Bitcoin, the token could drop further below $1, or alternatively, it could rally towards $1.3 again in search of more demand.

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