Since late November, Decentraland (MANA) has been in a steady downtrend as the bulls have been adamant about defending the $2 support.
Now, with the recent surge in selling pressure, buyers may find it difficult to find a close above the current pattern. A reversal from the $2.3 zone could trigger a rest test at the $2.1 basis before MANA makes a trend move. At the time of writing, the alt was trading at $2,3162, up 2.84% in the past 24 hours.
MANA Daily Chart
Source: TradingView, MANA/USDT
After a gradual decline in its ATH, the alt lost more than 70% of its value, reaching its 11-week low on Jan. 22. Since then, MANA has seen a solid recovery before reversing its three-month trendline resistance. Post that, it dropped below the 20 EMA (red) and 50 EMA (cyan).
For the past month, MANA has fallen into a falling wedge on the daily chart. The price has been in a tight phase for the past three weeks. So increase the chances of a possible volatile phase in the coming days. The recent bearish engulfing candlestick created a strong supply zone for the alt in the USD 2.3-$2.5 range.
From here, any close above the current resistance could lead to a test of the wedge’s upper trendline before a test of the USD 2.1 base. After this, any patterned pimples may have a hard time knocking over the smooth zone. As the 20 EMA moved closer to the 200 EMA, a bearish crossover would reconfirm its near-term bearish strength.
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Source: TradingView, MANA/USDT
The RSI has fluctuated sideways over the past five days and has largely resonated with the price. Going forward, any bullish comebacks could find resistance near the 44 mark.
Furthermore, the CMF fell steeply below the zero line as it looked south. This reading alluded to declining money flows in crypto while general sentiment was still dominated by fear. To top it off, the ADX continued to show a weak directional trend for the alt.
Conclusion
Given the recent supply zone and declining cash flows, buyers will need to ramp up volumes to reverse the existing reversal pattern. Still, the alt shared a 63% 30-day correlation with Bitcoin. So it is crucial to keep an eye on the movement of the king coin in addition to the above analysis.