- Decentraland price weakness continues despite the post-flash-crash rally.
- Oscillators point to further downside moves.
- Metaverse and gaming token space remains extremely overbought and parabolic.
Decentraland price faces intense selling pressure as the cryptocurrency market reels from uncertainty. Sellers attempt to push Decentraland’s close to a twenty-day low. The weekly chart indicates lower prices are almost unavoidable.
Decentraland price correction to continue, bear attack not complete
Decentraland price action has been the definition of what a whipsaw looks like. The Saturday flash crash saw Decentraland make a 65% gain from the lows and then push a daily close above the open – a feat almost no other cryptocurrency could accomplish. However, that bullish response was unable to convert into sustained momentum.
There remains a natural correction that has yet to occur for Decentraland. Decentraland price did move to that correction zone, but no meaningful close in that value area occurred. That value area is between the 50% Fibonacci retracement at $2.00 and the 38.2% Fibonacci retracement at $2.48. Until there is a daily or weekly close near at least the $2.50 level, Decentraland remains highly overbought.
The weekly Relative Strength Index shows how excessive Decentraland’s rise remains. The Relative Strength Index recently came out of extreme overbought levels, moving only just below the 80 levels last week. It has not moved to test the oversold levels at 50 or 40 since the beginning of the most recent spike during the week of October 29th.
Ideally, Decentraland price would have a weekly close near the $2.00 level. That would certainly position the Composite Index at or below the September 24th low, creating a tremendous hidden bullish divergence. Additionally, the Relative Strength Index would be right on top of the 50 level.
MANA/USDT Weekly Ichimoku Chart
One of two moves must occur to invalidate the near-term bearish bias and outlook. The least likely to occur would be Decentraland price moving to new all-time highs. Instead, the most likely scenario is a return to equilibrium over time, where Decentraland price would trade sideways with the Tenkan-Sen and Kijun-Sen, flattening out with weeks of trading between the $3.25 $3.50 value areas.