Can MANA’s bullish intent materialize despite BTC falling below $20k
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.
Across the altcoin market, there were instances of coins breaking their market structure on the lower timeframes and presenting a bullish bias. Decentraland was one of these coins. Yet, the overall sentiment around the crypto market was mostly fear.
In such a market, trying to buy crypto assets might end up in realized losses for a trader. Hence, patience could be the key. A bearish break can be used to enter a short position instead.
MANA- 1 Hour Chart
In the past few days, MANA registered a swing low at $0.74 but has made a series of higher lows since. At the same time, the price has also managed to close a session above a previous lower high.
This signified a break in the previously bearish market structure. The trendline support (yellow) has been respected thus far. It could continue to act as support over the weekend as well.
To the north, the $0.91 and $0.95 levels are likely to act as resistance. Therefore, any long positions, while risky, can look to take a profit in that region. A stop-loss below $0.8 support may also be considered.
Rationale
The RSI hovered about the neutral 50 line to signal the lack of strong momentum behind MANA. On the other hand, the A/D line has made higher lows alongside the price. This meant that there has been a decent buying volume behind MANA’s rally from the $0.74 lows.
The Stochastic RSI was headed toward the oversold territory. A bullish crossover on this indicator can aid in finding an entry to scalp long positions on MANA.
Conclusion
According to the current market condition, buying Decentraland, even for a short-term move upward, is inherently quite risky. Instead, risk-averse traders might want to wait for the $0.9 area to be tested to consider entering a short position.
A southward move for Bitcoin could see MANA rapidly shed recent gains. Notably, at the time of writing, Bitcoin dropped below its $20k mark to trade under the 2017 all-time high.
