Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice
The outlook for Bitcoin remains bearish on the lower timeframes after it slipped beneath the $30k mark on 18 May. A majority of the crypto market also took a hit, and Decentraland also shed nearly 13% after Bitcoin’s dip below $30k.
However, Decentraland was actually one of the stronger performing coins of the past week. It reached an area of supply on the price charts, but the bulls were rebuffed on their first attempt to climb past resistance. Do they have to strength to try again?
MANA- 2 Hour Chart
Source: MANA/USDT on TradingView
The Fibonacci retracement levels showed the 61.8% retracement of the downward move from $1.679 to $0.629 to lie at $1.27, which had good confluence with a higher timeframe region of former support, now turned resistance.
At press time, MANA had dropped to the $1 area, which is a psychological level of significance. Moreover, it had further confluence from the 38.2% retracement level as well as a longer-term horizontal level.
Therefore, in the next few hours or even on 20 May, the $0.95-$1 area would be of vital importance for the bulls to defend.
Rationale
Source: MANA/USDT on TradingView
On the two-hour chart, the RSI was below the 40 mark to show strong bearish momentum. Also, there was a market structure break from bullish to bearish when MANA closed a session below the $1.1 mark. Therefore, the rally from $1 to $1.3 did shift the bias from bearish to bullish, but its inability to defend $1.1 tipped it back in favor of the bears.
The OBV also dropped beneath the past week’s support to suggest that selling volume was dominant in recent days. Moreover, even on MANA’s rally, the OBV was unable to continue to climb higher.
The DMI also showed the resumption of a strong bearish trend recently, when the -DI (red) and the ADX (yellow) both climbed above the 20 mark.
Conclusion
The strength of the sellers in the past few days has shown itself on the OBV, but the $1 support has a strong confluence on the lower timeframes. A drop below $0.98-$0.95 could see MANA take a tumble on the price charts.
