Decentraland’s price has shown considerable resilience relative to other altcoins. Another impressive development from MANA is that it has managed to stay afloat, despite the Russia-induced flash crash across financial markets. Furthermore, MANA’s price seems to be picturing the formation of a bottom reversal pattern, one that forecasts gains for the metaverse token.
MANA stands its ground
MANA’s price witnessed an exponential run-up in late October after the announcement from Meta, formerly Facebook. This upswing propelled it by 693% to set a swing high of $5.91 on 24 November.
Since this point, MANA has retraced multiple times, producing lower highs and equal lows. As a result, Decentraland has bounced off its crucial support level at $2.20 thrice, forming a triple bottom setup. This technical formation is a bottom reversal pattern that forecasts a trend reversal, stipulating gains for the metaverse token.
Investors can expect MANA to rally by 28% before encountering a resistance barrier at $2.83. While there is a good chance the alt can set a local top here, a pile-up of bid orders could send MANA exploding to $3.5, constituting a 58% ascent.
There is a good chance market makers might sweep the $3.5 barrier to collect buy-stop liquidity resting above it.
What do the metrics tell us?
Supporting this claim from a technical perspective is the recent downtrend in the supply of MANA tokens on exchanges. This number has reduced from 809.05 million to 805.03 million tokens over the last three days.
In total, 4 million MANA tokens have left centralized entities over the last three days, suggesting that its investors are highly bullish on the performance of the token.
Source: Santiment
Adding credence to the bullish thesis is the 30-day Market Value to Realized Value (MVRV) model. It was ticking around -9.38%, at press time. This negative value suggests that the risk of a sell-off is relatively low.
This indicator is used to approximate the average profit and loss of investors who purchased MANA over the last month. If these holders are in profit, there is a chance of a potential sell-off, but if the holders are underwater, the likelihood of these buyers selling their holdings at a loss is low.
In light of the aforementioned value, there is a good chance long-term holders are accumulating MANA at its current price levels. Hence, market participants can expect to see a bullish turnaround for the metaverse token in the near future.
Source: Santiment
While things look bullish for MANA, investors need to be cautious as the crypto-markets have become more volatile than usual. Therefore, a potential spike in selling pressure, one that knocks Decentraland to produce a 3-day candlestick close below $2.20, will invalidate the bullish thesis.
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