Decentraland (MANA) price analysis: a bottom formation is in process
Decentraland may attempt a rally in the short term
The crypto markets are reeling under pressure, and Decentraland and its MANA token are no exception. The buyers are attempting to defend the psychological level of $1 as of 24 May 2022.
Investors are bullish on the prospects of the metaverse in the long term, and Decentraland is among the major players present in the space. However, during a bear phase, investor interest tends to decrease and that can be seen in the dwindling sales of virtual land by Decentraland. The sale of land surged to 1,551 units in November 2021 but has since dropped to 821 units in April 2022.
Although prices fall like there is no bottom during bear markets, the lower levels allow investors to accumulate for the long term. Back in December 2021, Cathie Wood, founder and CEO of Ark Invest told CNBC that the metaverse could become a multi-trillion-dollar opportunity.
Wood said: "It's a big idea that will probably infiltrate — just like technology is, anyway — every sector in ways that we cannot even imagine right now," Markets Insider reported.
Could decentraland start a recovery? Could decentraland go up? Read the MANA price analysis to find out.
Decentraland price technical analysis: weekly chart
Decentraland's price has been in a strong downtrend for the past several months. Though bulls had tried to start a recovery in the week before, the bears were in no mood to relent. They continue to sell on every minor rally.
The sellers will now attempt to pull the price to the critical support zone between $0.70 and $0.62, This zone is likely to attract buying by the bulls.
What is your sentiment on MANA/USD?
If the price rebounds off this zone, the bulls will attempt to push the MANA/USD pair to the 20-week EMA. This level may act as a strong resistance and the buyers will have to overcome this barrier to signal a potential trend change.
On the downside, if bears sink the price below $0.62, the pair could extend its slide to $0.50 and later to $0.41.
Decentraland price technical analysis: daily chart
Decentraland’s price has been facing strong resistance at the 20-day EMA but a minor positive is that the bulls have not allowed the price to break and sustain below the psychological support at $1.
If bulls thrust the price above the 20-day EMA, it will indicate that the bears may be losing their grip. The pair could then rally to the 50-day simple moving average (SMA) where the bears may pose a strong challenge.
This bullish view will be invalidated in the short term if the price breaks and sustains below $1. If that happens, it will suggest that bears are in command and they are selling on every minor rally. The pair could thereafter drop to $0.62.
Decentraland: buy or sell this week?
Decentraland is getting squeezed between $1 and the 20-day EMA. This tight-range trading is unlikely to continue for long. A strong break and close above the 20-day EMA could tilt the advantage in favour of buyers. The decentraland price analysis suggests that the pair could then rally toward the 50-day SMA. Conversely, a break below $1 could indicate that bears remain in command. The pair could then retest the strong support at $0.62.
The views and opinions expressed in the article are those of the author and do not constitute trading advice. Trading and investing involve substantial risks and you should do your own research or contact your financial adviser before arriving at a decision.