What are the chances of buyers keeping Decentraland afloat above $3 support
With a market cap of $5.9 billion, Decentraland stood as one of the biggest and most popular metaverse tokens in the crypto sphere. On the charts, the price struggled to climb above the $3.4 mark in recent days. This could be another accumulation phase before a breakout, but it could also see Decentraland drop to $2.4 in search of buyers if $3 was claimed by the bears.
In mid-December, MANA appeared to break out of a descending wedge pattern and reached resistance at the $4 area, $3.97 to be exact. This gave credence to the trendline resistance (yellow), marking the most recent touch as the third.
The $2.93-$3.08 area (cyan box) has been an area where buyers have stepped in to bid in recent weeks. Back in November, this was an area that was flipped from supply to demand before MANA’s breakout to reach $5.8.
Beneath the $3 area was another region where demand can be expected to be strong, the lower cyan box in the $2.2-$2.4 zone.
To the upside, $3.6 and the descending trendline can be expected to offer significant strength.
Rationale
The MACD showed strong bullish momentum, which flipped bearish on the retracement and was currently bearish too, and has also formed a bearish crossover. The Chaikin Money Flow also showed capital flowing out of the markets as sellers looked to drive prices lower.
The OBV had two levels marked (white) within which the balance has been maintained over the last month. The OBV’s move above or below the area it was currently within would be a strong indication of which direction the market leaned toward.
Conclusion
Momentum and capital flow suggested that bears still retained control of the market direction. The price has bounced off $3 once in recent weeks, and another bounce could occur, making the $3 area a place where MANA can be bought with a tight stop-loss.
However, losing $3 and retesting it as resistance was likely to take MANA to $2.4. On the other hand, breaking the trendline resistance and a few days of sideways trading would likely prime Decentraland for another run upward. In that, the $3.6, $4, and $4.3 levels will likely offer resistance.
