Mantra (OM) price has seen an impressive 46% increase in the past 30 days, reaching a new all-time high on October 7. This rapid rally has put OM in the spotlight, but with signs of momentum fading, traders are questioning whether a correction is imminent.

The Average Directional Index (ADX) has fallen from 30 to 21.96, signaling a decline in trend strength. Furthermore, the Ichimoku Cloud indicators and short-term moving averages suggest that the bullish momentum may be losing steam. Will Mantra pull back before attempting another run to new highs, or will it be able to sustain its upward trajectory?

OM uptrend is fading

OM’s ADX is currently at 21.96, down from 30 just two days ago. ADX (Average Directional Index) is a technical indicator that helps measure the strength of a market trend, regardless of its direction.

It operates on a scale of 0 to 100, with key thresholds that help interpret the trend. An ADX below 25 generally suggests a weak or directionless trend, while values ​​between 25 and 50 indicate a strong trend. Any value above 50 reflects an extremely strong trend.

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While OM is still in an uptrend, its ADX at 21.96 suggests that the trend is not as strong as it was a few days ago, when its price reached a new all-time high of $1.47. This weakening of the trend suggests that the bullish momentum may be losing steam, making the uptrend less convincing and more susceptible to potential slowdowns or sideways movements.

OM ADX. Fonte: TradingView

Traders should watch this closely as the reduced ADX indicates that the uptrend is not as powerful as it was just a few days ago, increasing the risk of a reversal or a stall in price growth.

Ichimoku Cloud Shows Mantra May Be Losing Momentum

The Ichimoku Cloud chart for Mantra reveals a price currently situated above the cloud, which indicates that it is in a bullish phase. However, recent price action suggests a loss of momentum as OM has retreated from its recent all-time high near $1.45 to the current level of around $1.34.

Despite this pullback, the cloud (Kumo) below acts as a critical support zone, and its thickness implies that this support is relatively strong. The future cloud appears green and thick, reinforcing the idea that the bullish momentum could persist in the long term, but this depends on whether the price holds above key levels.

The Tenkan-sen (blue line) and Kijun-sen (red line) lines are showing some interaction here. The Tenkan-sen has crossed below the Kijun-sen, which often signals a short-term bearish or corrective move. However, the fact that the price remains above the cloud suggests that this may just be a temporary correction rather than a trend reversal.

OM Ichimoku Cloud. Source: TradingView

Furthermore, the Chikou Span line (green lagging line) is well above the price level, reinforcing that the overall sentiment remains bullish. However, the distance between the Chikou Span and the price is decreasing. This could be an early sign that the bullish momentum is fading.

Although the OM remains in an uptrend, as indicated by price being above the Ichimoku Cloud, recent short-term signals suggest that the uptrend is weakening. The thick cloud below offers strong support, and as long as price holds above this level, the broader bullish sentiment is likely to persist.

Price forecast

The Mantra EMA lines are currently showing a bullish structure, with the short-term EMAs positioned above the long-term ones, a typical sign of upward momentum. However, the short-term EMAs are starting to point downwards, indicating that the strength behind the uptrend is fading.

If these short-term EMAs continue their downward movement and cross below the long-term EMAs, a “death cross” will occur. This would signal the start of a possible downtrend. This is a critical bearish indicator that could change market sentiment.

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EMA (Exponential Moving Average) is a popular technical tool used to smooth out price action and give more weight to recent data, making it highly responsive to market changes. It helps traders identify trends and potential reversals more effectively than simple moving averages.

In the event of a downtrend, OM has strong support levels around $1.18 and $1.10. If bearish momentum increases in the coming days, these zones could be tested. A correction in OM's price could occur before it attempts to reach a new all-time high after rising 46% in a month.

OM EMA and Support and Resistance lines. Source: TradingView

On the other hand, if market sentiment improves and the uptrend strengthens again, OM could gather enough momentum to retest its all-time high of $1.47. A break above this level would likely push the price to new heights, potentially triggering further bullish activity.

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