Decentraland (MANA) Increases by 70% Since Jan 24 Lows


Decentraland (MANA) has broken out from a long-term pattern, potentially signaling that the correction ongoing since Nov 25 is complete.

MANA had been decreasing inside a descending wedge since reaching an all-time high on Nov 25. The downward movement led to a low of $1.70 on Jan 22. Since then, the token has been moving upwards. 

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On Jan 31, MANA broke out from the aforementioned descending wedge. Despite the breakout, it is still trading 52% below its all-time high price. 

Currently, it is inside the $2.85 horizontal resistance area. If it were successful in moving above it, the next resistance would be at $3.81. This is both a horizontal resistance area and the 0.5 Fib retracement resistance level.

MANA Wedge
Chart By TradingView

Cryptocurrency trader @PostyXBT tweeted a MANA chart, stating that the token could get rejected by the $2.85 resistance area. Since the tweet, the token has reached this area and dropped slightly afterwards.

MANA Move
Source: Twitter

Future MANA movement

Despite the fact that MANA is trading inside resistance, technical indicators are still bullish. 

The MACD, which is created by a short- and a long-term moving average (MA), is moving upwards and is nearly positive (green circle). This is a sign that the trend is gradually turning bullish. 

Also, the RSI has just moved above 50. The RSI is a momentum indicator and readings above 50 are considered signs of a bullish trend. More importantly, the previous time this occurred was on Oct 2021, preceding the entire upward movement to the all-time high price.

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Therefore, it is possible that an upward movement will also follow this time around, taking MANA at least to the $3.81 resistance area.

MANA Wedge
Chart By TradingView

Wave count analysis

Measuring from June 2021, it seems that MANA has just begun wave five of a five wave upward movement (white). In this scenario, it completed a fourth wave pullback with its Jan 22 low. 

The first potential target for the top of this move would be at $8.38, created by the 1.61 external Fib retracement resistance level. The second target would be at $11.16, created by the 0.382 length of waves 1-3 (white).

It is also worth mentioning that the only other time the MACD histogram generated bullish divergence was on May – June 2021, (green lines), preceding the current upward movement.

MANA Count
Chart By TradingView

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