tl;dr
MANA, Decentraland's cryptocurrency, has surged by 70% in the past week, reflecting a broader rally in Metaverse-related tokens. The increase in MANA's active addresses and trading volume has been a significant factor in this surge. However, on-chain analysis suggests a potential pullback, with the ...
MANA, Decentraland's cryptocurrency, has surged by 70% in the past week, reflecting a broader rally in Metaverse-related tokens. The increase in MANA's active addresses and trading volume has been a significant factor in this surge. However, on-chain analysis suggests a potential pullback, with the price possibly dropping to $0.61 in the short term, unless buying pressure increases to sustain the uptrend.
The recent rally in MANA crypto price can be attributed to a significant increase in the token's active addresses, which indicates heightened user interaction on the blockchain. Interestingly, this also matches the condition of The Sandbox (SAND), which was also one of the frontrunners of the Metaverse revival. Active addresses measure the number of unique users successfully completing transactions. A rise in this metric signals increased engagement with the network, which is often considered bullish for a cryptocurrency. Conversely, a decline implies reduced traction, which is typically seen as bearish.
Following the development, Santiment data showed that MANA's volume climbed to $1.57 billion. Volume represents the total value of a specific cryptocurrency traded over a defined period. This metric reflects a coin's level of activity and liquidity. A high trading volume indicates notable buying and selling, which often suggests strong market participation. On the other hand, low volume may signify reduced activity, leading to weaker market interest. Therefore, the hike in the token's volume validated the signs shown by the active addresses.
From an on-chain perspective, the MANA crypto price rally might have hit a local top. This prediction is based on the signs shown by the In/Out of Money Around Price (IOMAP). The IOMAP is a key metric that analyzes the distribution of cryptocurrency holders based on whether their holdings are in profit, loss, or at breakeven. It also provides insights into potential support and resistance levels in the market.
As such, the MANA crypto price might experience retracement. If that is the case, then the cryptocurrency's value could drop to $0.61 in the short term. However, if buying pressure increases and volume outpaces the one at $0.70, this might not happen. Instead, MANA could climb to $0.80.