MANA, the native cryptocurrency of Decentraland, has seen a 70% price increase over the past week. This increase in MANA’s price is part of a broader rally in Metaverse-related tokens that has caught the market’s attention.
While the development may have surprised some, a closer look from BeInCrypto provides insights into the catalysts behind this move. This on-chain analysis examines what could come next for the token.
Decentraland Active Addresses and Volume Reach New Heights
The recent rally in MANA’s price can be attributed to a significant increase in the token’s active addresses, indicating increased user engagement on the blockchain. In fact, this also coincides with the status of The Sandbox (SAND), which has also been one of the leaders of the Metaverse revival.
Active addresses measure the number of unique users who successfully complete transactions. An increase in this metric signals increased engagement with the network, which is generally considered positive for a cryptocurrency. Conversely, a decrease implies lower traction, which is generally seen as negative.
On November 20, MANA’s active addresses were around 810. Fast forward a few days and that number has increased nearly fivefold, reflecting a growing interest in the token. This spike in activity likely provided the impetus for MANA’s price to rise from $0.40 to $0.70, its highest level since March.
Decentraland Active Addresses. Source: CryptoQuant
Following the development, data from Santiment showed that MANA’s volume surged to $1.57 billion. Volume represents the total value of a specific cryptocurrency traded in a defined period.
This metric reflects the level of activity and liquidity of a coin. High trading volume indicates high buying and selling, which often suggests strong market participation. Conversely, low volume can mean reduced activity, leading to weaker market interest.
Therefore, the increase in the token’s volume has validated the signals shown by active addresses. However, as the MANA price has fallen from its recent peak, it may be challenging to maintain the uptrend, with this analysis suggesting that another pullback may be in the offing.
Volume do Decentraland. Fonte: Santiment
MANA Price Prediction: Pullback Imminent
From an on-chain perspective, the MANA price rally may have reached a local top. This prediction is based on the signals shown by the In/Out of Money Around Price (IOMAP).
IOMAP is a key metric that analyzes the distribution of cryptocurrency holders based on whether their holdings are in profit, loss, or breakeven. It also provides insights into potential support and resistance levels in the market.
Large “out-of-the-money” clusters indicate addresses that purchased at a price higher than the current market value, and often act as resistance zones. On the other hand, large “in-the-money” clusters tend to act as support, as holders, waiting for an appreciation, may increase their positions or avoid selling.
For MANA, approximately 36.47 million tokens held by addresses that accumulated close to $0.70 are currently “out of the money.” This volume dwarfs tokens held between $0.61 and $0.68, marking this range as a key resistance zone.
Decentraland In/Out of the Money. Fonte: IntoTheBlock
Thus, the price of MANA may experience a pullback. If that is the case, the value of the cryptocurrency may drop to $0.61 in the short term.
However, if buying pressure increases and volume surpasses $0.70, this may not happen. Instead, MANA could rise to $0.80.
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