Decentraland (MANA) price is trading inside a corrective pattern from which it could break.
The price of Decentraland has risen sharply since the beginning of the year, reaching a high of $0.82 on January 27. This movement caused a breakout from the long-term descending resistance line that was previously present since May 2022.
If the rise continues, the next nearest resistance area will be at the average price of $1.10. The area has not been accessed since August. (red icon).
However, the daily RSI casts doubt on the chances of an upside move, despite the bullish price action. This is because the indicator has generated a significant amount of bearish divergence (green line), falling below 70 in the process. Both of these are considered to be signs of a bearish trend.
As a result, the most likely future movement is a drop to validate the confluence of support levels at $0.55, which is formed from the 0.5 Fib retracement support level and the resistance line that the digital asset broke earlier.
Decentraland Price Prediction for February: Expect a correction before the uptrend resumes
Technical analysis from the short-term six-hour chart provides a Decentraland price forecast for February, aligning with readings from the daily time frame. The reasons for this are twofold:
Firstly, MANA price has been trading inside an ascending parallel channel since Jan 16. Such channels usually have corrective upswings. Therefore, breaking out of it would be the most likely scenario.
Next, similar to the daily time frame, the six-hours RSI has formed a bearish divergence (green line). As a result, a breakdown of the channel is the most likely scenario.
If this happens, Decentraland price is expected to reach the $0.55 support area. In addition to being the 0.5 Fibonacci retracement support level and coinciding with the previously mentioned resistance line, the $0.55 level is also a horizontal support area.
Due to this confluence of support levels, this is the most likely scenario once a rally occurs.
To conclude, the most likely Decentraland price prediction for February is a breakout from a short-term ascending parallel channel followed by a decline to $0.55. After this the upward movement can continue.
A breakout from the channel would invalidate this bearish Decentraland price forecast. In this case, the price of MANA is expected to rise to $1.10.
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