Decentraland price forms a dead-cat bounce, 18% correction on sight

Decentraland (MANA) is a bit of an outlier as it is up for the day, where most significant cryptocurrencies pairs are down. The risk at the current price action is that bulls could get caught in a bull trap or a dead-cat bounce after the dip from the past two days. Expect MANA price action to dip further towards $2.15 by the end of the trading session today.

MANA price action sets the stage for a bull trap

Decentraland is not enjoying the start of a new month, as price action has slipped over the past two days and sees bulls trying to claw back as we speak. The problem is that global market sentiment is on the back foot again today after the shocking disappointment from META earnings released after the market close yesterday evening. The rebound at the moment is trying – but looks to be failing – to break above $2.68, with bears rejecting the attempts of bulls, and not yet ready to close out their short positions. 

With that move, bulls could find themselves trapped into an entry against the monthly pivot, with losses mounting as price action starts to fade away further from the pivot. Expect a retest of the low of today with a possible break lower. That could see MANA price action dip down even towards $2.15 if Nasdaq and other indices would dip further, resulting in a loss of 18% for Decentraland.

MANA/USD daily chart

As the META-shock is only a one-off event, expect investors to look beyond these results as earnings season continues quickly. This will result in a break above the monthly pivot, with price action popping above $2.68. Depending on the strength of the developing global tailwinds, the next target could see MANA hit $3.00, which falls in line with the 78.6% Fibonacci level. That would result in a 14% gain for Decentraland coins and see the Relative Strength Index (RSI) nearing the overbought area.