On the higher timeframes, such as the 12-hour and daily, Decentraland is in the danger zone for the bulls. There is simply not enough price action on the upside from $1 to $2.20 for any significant support to be established. In a previous article, it was noted that the $2.40 support could be tested and buyers would have to show some strength in this area. That didn’t quite materialize.
Source: MANA/USDT on TradingView
The price was forced to witness a deep drop in early December after hitting a high of $5.2 in mid-November. Trendline resistance (white) was tested once again. in late December, after price consolidating above the previous demand area at $3. Following a rejection at the trendline was the MANA sliding below the $3 zone of demand and it was moved from the demand zone to the supply zone (red).
Over the past few weeks, the price tested the resistance of this trendline again and was forced below the $2.43 support.
It was mentioned that the rapid rise from $1 in October (Uptober) failed to build enough support levels at which buyers could look to contest the bears. Several Fibonacci extensions on the lower time frame can be used to identify key levels below $2.
Theoretical basis
Source: MANA/USDT on TradingView
The RSI dipped below 30.93 and even on the 12-hour chart is deeply in oversold territory. This could see the price witness a gentle rally, although it remains unclear where this rally will begin.
Chaikin outflow is again below -0.05, which shows strong capital outflow from the market. Volume Oscillator also increased strongly due to high trading volume. This shows that the recent sell-off has high volume behind it.
Inference
Trying to pinpoint a market bottom is colloquially known as “knife-catching” because of how dangerous the activity can be. While MANA does not appear to have significant support levels established below $2, it is unlikely that buyers can step in and force a relief rally sometime in the next few days. Bitcoin and the rest of the crypto market have seen a sharp drop in prices, as has the performance of traditional markets in recent days. Maybe exercise some patience before looking for buying opportunities on Decentraland.