Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Decentraland is one of the largest metaverse projects in the crypto ecosystem, but the token MANA has been in a steady downward trend for the past few weeks. After a brief dip below the $0.72 support, the price is up an impressive 80%. However, this rally could be nearing its end and rejection in a resistance zone could happen the next day or two for the crypto asset.
MANA- 1 hour chart
The $1.25-$1.35 (red box) area is a higher-time delivery zone for MANA, which acted as a demand zone earlier this month. While MANA has seen a massive rally in recent days, the longer-term market structure remains bearish.
The last time MANA traded below $1.3 was in October 2021. The fact that sellers have managed to push prices below this area shows that there is probably no easy road to recovery in the coming weeks, and further disadvantage cannot be discounted in the coming weeks.
In the lower timeframes, there is strong evidence that large buying volume has propelled MANA into the $1.3 zone. However, this does not represent a buying opportunity, but instead presented an opportunity to sell or short the asset.
The MACD was well above the zero line and the MACD line (blue) was above the signal line (orange) to indicate a strong buy signal. However, in the past 24 hours, the MACD made a lower high even as the price made a higher high. This is a bearish divergence, and its importance is magnified because it occurred just below a supply zone.
The DMI showed a strong bullish trend after the nearly 80% pump from the $0.7 lows a few days ago. Similarly, the OBV also spiked upwards and broke the previous downtrend.
The indicators showed strong bullish momentum and strong demand behind MANA, but a bearish divergence also suggested a pullback could occur. In such a pullback, MANA could retest the $1 support level. Based on Bitcoin’s direction, the token could either fall further below $1 or, alternatively, find more demand and rise again towards $1.3.
This post Decentraland: MANA reaches resistance zone, is it time to go short?
was published first on https://ambcrypto.com/decentraland-mana-reaches-a-resistance-zone-is-it-time-to-go-short/