MANA benefitted hugely from this cycle’s NFT mania, but can it still thrive in bearish conditions?
Decentraland has made a splash in the world of cryptocurrency recently, creating a virtual world in which users can experience, view, and show off their NFTs. NFTs are non-fungible tokens — one-off tokens that contain artwork, in-game items, music, and more.
The native token of Decentraland is MANA, which powers the Decentraland virtual network. This powerful and innovative project has already garnered a fair bit of attention, so in this article we will assess the trading prospects of Decentraland for June and the rest of 2021.
Current Decentraland Price
The Decentraland token MANA is currently trading in the $0.75 region, having reached a peak earlier this year of $1.64. Although Decentraland has experienced a correction, it has still increased dramatically in value during 2021, and investors have clocked up year-to-date returns of over 800%. Early investors have done even better, with MANA changing hands for as little as five cents in November 2020 — just over six months ago.
It will be interesting to see whether Decentraland continues in what has recently been something of a miniature bear market, or whether its prospects will be bullish in the immediate future. There is an array of issues that will impact this, including macroeconomic forecasts. Low interest rates have made risk-on assets like MANA very attractive to investors.
Source: Coinbase
This should be bullish for Decentraland, while some technical analysts believe that the token has also staged a foundational base at its current price, and is ready to rise again after the recent correction.
Decentraland Price Forecast
NFTs are an exciting concept, and one that is changing the way that cryptocurrency operates. NFT tokens make it possible for the immutable ownership and efficient sales of collectable items in gaming. This is huge at a time when platforms such as Twitch are experiencing a massive explosion in interest, and it means that Decentraland can be involved in a variety of different businesses and ventures. It is even possible with NFTs for players to create in-game currencies, which are then sold to other users.
However, this isn’t the only application for Decentraland and other NFT tokens. NFT is already revolutionising the world of the arts, enabling artists to sell digital art directly to buyers, removing the need for a middleman. NFT also has applications in identity management, as storing identity on the blockchain offers a level of security and protection that was hitherto unimaginable.
Decentraland can also be used in real estate and supply chains, helping to improve and validate processes. This wide variety of use cases is extremely positive for a range of NFT tokens, and has led to two obvious market trends. Many of the NFT tokens have increased in value during 2021, and this definitely applies to Decentraland.
Source: Coinbase
Regardless of the validity of this prediction, what is clear is that Decentraland should have an extremely bright future based on the predictions for NFT tokens. Other blockchain networks such as Tron, Neo, and Eos are also building out NFT token standards, and it is clear that the technology will have a major influence over the future direction of cryptocurrencies.
It is the diversity of Decentraland as a platform that creates a compelling case going forward. Gamers, investors, and collectors have been flocking to the NFT market, both for practical reasons and also because they perceive that significant profits going forward are likely.
NFT tokens have caused some controversy in the cryptocurrency space, with some purists claiming that their non-fungible nature means that they are not true crypto tokens. This is a valid argument, but the fact that the NFT revolution is helping to change a variety of sectors, including art, music, sports collectables and video games, means that the outlook for projects such as Decentraland is extremely rosy.
Decentraland Price Discovery in June
Decentraland has been one of the cryptocurrencies that has been in an upward-trending market, despite slipping in value recently. Indeed, Decentraland and other cryptos have outperformed virtually any asset class or investment during the last 18 months, even if their behaviour has been somewhat volatile.
This is always some risk associated with cryptocurrencies, with the market known to be slightly more unpredictable than other investments. But given the increase in the price of MANA, the token has still certainly made for an excellent investment over 2021 as a whole.
An upturn in the prospects of Decentraland is now looming on the horizon, as the price of the cryptocurrency stabilises at a consistent level. Technical analysts have highlighted a bullish Moving Average Convergence Divergence, which suggests that more buyers will join the market imminently. This will then increase trading volumes, which can only be positive for the token.
Source: TradingView
As demonstrated in the above chart, MANA is currently in the midst of a wedge formation that will come to a point in the middle of June. Given the general uptick in sentiment in the market — Elon Musk’s comments are slowly fading into a whisper and Bitcoin has received plenty of bullish news — and the slowly recovering RSI, a break out to the upside looks very possible.
Obvious price targets for June, then, are the former resistance/support regions found at the psychological levels of $1 and $1.50. If the long term trendline (which constitutes the bottom of the wedge) holds, then the $1 level could flip to support before the end of June. If market sentiment reverses, and the bull market resumes fully, the next Fibonacci target above that is $1.76.
Please note, the above is a purely opinion-based piece, based on relevant data available. It should not be deemed as direct investment advice.