- 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.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.