The price of Mantra ($OM ), a prominent DeFi token, is at a critical juncture as technical indicators reveal increasing bearish pressure. OM has experienced a 13% decline over the past seven days, deepening its correction from the all-time high reached on November 18. The token's price is now down 21% from that peak, reflecting a significant retracement.
Mixed Technical Indicators Highlight Uncertainty
A review of key technical indicators offers a mixed outlook for OM's price trajectory. The Relative Strength Index (RSI) remains in neutral territory, while the Ichimoku Cloud suggests mounting bearish momentum. Further compounding concerns, a potential death cross formation looms, which could amplify selling pressure if confirmed.
RSI Stays Neutral but Leans Bearish
Since December 3, the RSI for OM has hovered in neutral territory, currently positioned at 38.3. As a momentum oscillator ranging from 0 to 100, the RSI indicates oversold conditions below 30 and overbought conditions above 70. Readings within the 40-60 range typically reflect a neutral market state.
At 38.3, OM’s RSI leans slightly bearish, sitting below the midpoint of 50 but not yet signaling oversold conditions. This prolonged period of neutral readings suggests a phase of consolidation, with traders awaiting decisive signals. A break above 50 could indicate bullish momentum, while a drop below 30 would confirm a bearish outlook.
Ichimoku Cloud Signals Bearish Sentiment
The Ichimoku Cloud analysis for OM points to an increasingly bearish trend. The Chikou Span (green line) has dipped below the price action, while the Conversion Line (blue) crossed below the Base Line (red) on December 19, forming a bearish cross.
The cloud itself has shifted from green to red, signaling a transition to bearish sentiment. OM is currently trading beneath the cloud and all key Ichimoku levels, reinforcing the downward momentum. However, the convergence of Ichimoku lines near the current price level hints at a potential consolidation phase or a reversal if sentiment shifts.
Key Support at $3.31 Critical for OM Price Stability
In the short term, OM's moving averages suggest waning momentum. The short-term moving average remains above the long-term average but is approaching a potential death cross. If the short-term MA crosses below the long-term MA, it could trigger increased selling pressure, testing the critical $3.31 support level. Failure to hold this support could push the price further down to $3.03.
Conversely, if OM regains bullish momentum before the death cross occurs, it could target immediate resistance at $3.76. Breaking this resistance might open the path toward $4.25, although such a scenario would require a substantial shift in market sentiment, potentially driven by renewed interest in Real-World Assets (RWA) narratives.
Conclusion
Mantra (OM) finds itself in a pivotal technical phase, with bearish indicators overshadowing the neutral RSI readings. The $3.31 support level remains fundamental to preventing further declines, while overcoming $3.76 resistance could reinvigorate bullish sentiment. Traders should closely monitor these levels and key technical signals to anticipate the token's next move.
