Decentraland to retest $3.25 as MANA consolidation continues
- Decentraland price remains inside the daily Ichimoku Cloud.
- Indecision and volatility are expected to continue.
- Profit-taking near all-time highs will weigh on any further upside potential.
Decentraland price maintains a value area above the most recent lows in the $3.00 price range. However, since entering the Cloud on December 17, its ability to maintain a bullish drive is now in question.
Decentraland price action to remain volatile, upside momentum limited
Decentraland price, while consistently rising over the past two weeks, is at risk of moving lower. The ranges of the past five daily candlesticks have continued to constrict and have created a short-term rising wedge pattern, a warning sign that upside momentum is likely to terminate very soon.
Two other factors warn of upcoming weakness for Decentraland price: the Relative Strength Index (RSI) and the Composite Index oscillators. The RSI has recently moved above the first oversold level in a bull market (50), but the slope has flattened and is beginning to curve south. Additionally, the Composite Index is facing against a prior uptrend angle and has started to point south.
MANA's upside potential is likely limited to the top of the Cloud (Senkou Span A) at $4.48 between December 27 and December 29. After that, that level drops to $4.01 between December 30 and January 4, 2022.
Downside risks are currently limited to the bottom of the Cloud (Senkou Span B) at $3.25. It is expected that this is where Decentraland price will return over the next two to three weeks.
Decentraland bulls and bears should be aware of the dangers of participating in any instrument inside the Cloud. The Cloud represents volatility, indecision, and frustration. Whipsaws and false breakouts are extremely common. In fact, within the Ichimoku Kinko Hyo system, it is advised that people ignore any instrument that is trading inside the Cloud.
A rotation of capital out of cryptocurrencies in the metaverse and gaming token space is expected. As a result, speculators will likely book profits from those cryptocurrencies and target cryptos with better upside potential than Decentraland price and other similar instruments.
Author
Jonathan Morgan
Independent Analyst
Jonathan has been working as an Independent future, forex, and cryptocurrency trader and analyst for 8 years. He also has been writing for the past 5 years.
