Decentraland bucks bearish trend but MANA may retrace to $3
|- Decentraland price has been a significant overperformer and leader in the altcoin space.
- While the broader cryptocurrency market sold off, MANA rallied and held onto its gains.
- Hints of a temporary top have developed, pointing to some likely profit-taking ahead.
Decentraland price has undoubtedly been one of the few bright spots for bulls this week. It has traded nearly 100% to the inverse of nearly every other primary cryptocurrency. However, Decentraland’s Point and Figure chart shows a pullback may be coming soon.
Decentraland price gained nearly 30% for the week while Ethereum lost as much as 15%
Decentraland price has several warning signs that the current uptrend may be ready for a pause. On the weekly Ichimoku chart, the Relative Strength Index is up against the final overbought condition at 90. Additionally, the Composite Index is trading at a new all-time high and well extended from its historical resistance zone. Combining those two oscillator conditions points to a highly expansive move that is likely due for a correction.
The $0.05/3-box Point and Figure chart displays the beginnings of how that pullback may play out. If a new column of Os develops and creates a triple-bottom at $3.90, then a short trade opportunity will present itself.
The theoretical short entry would be a sell stop order at $3.85, a stop loss at $4.05 and a profit target at $3.00. While the breakout of a triple-bottom is one of the most sought-after short entry opportunities in Point and Figure analysis, the entry would also confirm a Bull Trap pattern. If the current X column were to move to $4.20 and then reverse to the entry, that would create an even stronger bull trap known as a Bullish Fakeout.
MANA/USDT $0.05/3-box Reversal Point and Figure Chart
The hypothetical short entry is invalidated if Decentraland price moves to or above the $4.25 price level. From there, new all-time highs near the $5.00 range should be expected.
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