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Why Decentraland [MANA] will continue its downtrend on the price charts

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Why Decentraland [MANA] will continue its downtrend on the price charts

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Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice

  • Crucial resistance levels at $0.72 and $0.82
  • Despite the recent bounce, a bearish order block impeded the bulls’ efforts

Decentraland had a market cap of $1.12 billion at press time, but this figure could go lower in the coming weeks. MANA has been strongly bearish since August. Its inability to hold on to $0.75 brought another wave of selling to the market. A similar scenario could unfold if MANA headed beneath $0.6.

Here’s AMBCrypto’s Price Prediction for Decentraland [MANA] in 2022

Decentraland developed a bearish divergence on the charts near a Fibonacci retracement level of importance. This development, along with the lack of demand in recent weeks, hinted that MANA might be headed for another move lower on the price charts.

The onslaught from the sellers can resume soon

Here is why Decentraland [MANA] will continue its downtrend on the price charts

Source: MANA/USDT on TradingView

Based on the move down from $0.755 to $0.584, a set of Fibonacci retracement levels was plotted. The 38.2% retracement level of this move lay at $0.65. This level has acted as a stiff resistance over the past two weeks.

At this key level, a bearish order block was observed. Marked in red, it highlights a region where traders can look to enter short positions on MANA targeting a move to $0.584 or even lower, the 23.6% extension level at $0.544.

The A/D indicator formed a series of lower highs since mid-September to show selling pressure was dominant. The 12-hour RSI has been beneath neutral 50 for nearly two months to show steady downward pressure. The market structure has also been bearish, although it broke the structure a couple of days ago when the price closed above $0.618.

Highlighted in white, a bullish divergence was seen which was followed by a bounce from $0.59 to $0.625. This development was followed by the development of a hidden bearish divergence (dotted white) which denoted that the previous downtrend was likely to continue.

MVRV is at long-term lows, with no indication of a bottom yet

Here is why Decentraland [MANA] will continue its downtrend on the price charts

Source: Santiment

In January 2019, the 365-day MVRV ratio reached a low of -60.5%. In May, when the price dropped to $0.7, the ratio went as low as -71.8%. At the time of writing, it stood at -71.15%. The inference was that a majority of the token holders were at a loss. Social Dominance was also not as high as it once was, but recent weeks did see this metric push higher to 0.7%.

That, by itself, does not mean that the price has found its long-term bottom. It could go lower still, and technical analysis showed that another move beneath $0.6 could materialize in the coming weeks.


Akashnath is a Chemical Engineering graduate deeply fascinated by Technical Analysis and the crypto markets and enjoys studying price movements and trying to find patterns.
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