Since its ATH on 25 November, Decentraland (MANA) has been on a steady downtrend while the bulls kept defending the $2-$2.3 range.
Now, a compelling close above the $2.3 base is needed to confirm the strength of its recent falling wedge (white). Should the selling spree continue, MANA would pick itself up from the $2.1-mark support (white, dashed). At press time, MANA traded at $2.3689, down by 4.7% in the last 24 hours.
MANA Daily Chart
Source: TradingView, MANA/USDT
After a steep downfall from its lifetime milestone, the alt lost over 70% of its value and poked its 11-week low on 22 January. Since then, MANA doubled its value before reversing from its long-term trendline resistance. Post which, it dropped below crucial price points.
Over the past month, MANA depreciated in a falling wedge on its daily chart. Since its decline phase, the alt has struggled to keep itself above the mean of Bollinger Bands (BB). The price has entered into a tight phase in the last three weeks. Thus, hinting at a possible volatile phase in the days to come.
From here on, the $2.3-mark would be a vital price point for the buyers to step in and prevent a further decline. Also, recently the volumes have been on a plunge. Hence, revealing a weak bear move. If the bulls manage to uphold the immediate support, the alt would likely continue its low volatility phase before making a trend committal move.
Rationale
Source: TradingView, MANA/USDT
The RSI has significantly weakened over the last month. After forming a descending triangle-like pattern, the 40-point floor would be crucial for the bulls to defend. A reversal from this mark would keep up the recovery hopes alive. Also, the Squeeze Momentum Indicator affirmed the squeeze phase over the last three weeks. Thus, reaffirming the possibility of a volatile period in the coming days.
Conclusion
MANA is truly in a dicey territory. If the bulls ensure the $2.3-base, the chances of a reversal from its falling wedge were bright. But a close below this level could cause a $2.1-retest before a revival phase. Besides, the alt shared a 73% 30-day correlation with Bitcoin. So, keeping a watch on the king coin’s movement would be crucial to complement the above analysis.
