Nov 21, 2024

6thTrade

Mantra (OM) recently experienced an explosive rally, surging 155.29% within a week to hit a new all-time high (ATH) on November 18, 2024. While the strong bullish momentum has propelled OM to its highest levels, market indicators now suggest that this momentum may be waning, with signs of a potential reversal.

Key Highlights:

  • Explosive Rally: OM surged 155% in seven days, reaching its ATH on November 18.

  • Neutral RSI: The Relative Strength Index (RSI) dropped from overbought levels to a neutral 52.7, reflecting reduced buying pressure.

  • Weakened Uptrend: The Ichimoku Cloud indicates that OM is nearing critical support, with risks of transitioning into a bearish trend below $2.98.

RSI Signals Eased Buying Pressure

OM’s RSI, which measures the strength of price movements, recently fell to 52.7. This marks a significant decline from the overbought territory (above 70) seen between November 16 and November 18, during which OM achieved its ATH.

Key RSI Insights:

  • Neutral Range: At 52.7, the RSI reflects a balanced market, with buyers and sellers exerting equal influence.

  • Momentum Slowdown: The drop from overbought levels suggests that earlier bullish momentum has eased, signaling a potential market cooldown.

Ichimoku Cloud Suggests Weakening Uptrend

The Ichimoku Cloud, a comprehensive trend-following indicator, reveals that OM’s uptrend is showing signs of weakening:

  • Loss of Short-Term Momentum: OM’s price has fallen below the Tenkan-sen (blue line), signaling reduced short-term strength.

  • Approaching Key Support: The price is nearing the lower boundary of the green cloud (Kumo), a critical support zone.

Potential Outcomes:

  • Bearish Reversal: A close below the cloud would confirm a transition into a bearish trend.

  • Support Holds: If the green cloud provides enough support, OM could stabilize and potentially regain upward momentum.

Price Prediction: Will OM Drop Below $3?

Bearish Scenario:

If the downtrend continues, OM could test its nearest support at $2.98. A failure to hold this level may result in a deeper decline, with the price potentially falling to $1.81, indicating a stronger bearish reversal.

Bullish Scenario:

If the uptrend recovers, OM could aim for new highs by challenging the $4.53 resistance zone. Breaking through this level would pave the way for OM to surpass its previous ATH and solidify its position as a leading player in the real-world assets (RWA) ecosystem.

Conclusion

Mantra (OM) has delivered impressive gains, but indicators now suggest caution. The neutral RSI and weakening Ichimoku Cloud support hint at a possible correction or consolidation phase.

For OM to sustain its momentum and pursue new highs, it must hold key support levels and regain market confidence. Traders should closely monitor these critical zones as the memecoin navigates its next moves.