The Decentraland price has struggled in the past few weeks. MANA, the platform’s native token, has dropped by more than 45% from its highest level in November. Other metaverse coins like The Sandbox and Gala have also retreated sharply in the past few weeks.
Why has MANA retreated?
The metaverse industry has been on fire recently as analysts predict that it is the next big thing in the technology industry. Already, companies like Apple, Facebook, and Nvidia have already announced their plans for the industry.
The growth of this industry has pushed more investors and enthusiasts to move into the industry. In the past few months, the number of transactions in the metaverse has jumped. For example, the number of million-dollar purchases in platforms like Decentraland and Sandbox has risen substantially.
As a result, Decentraland’s MANA price has jumped sharply in the past few months. Precisely, it has risen by more than 350% from its lowest level in November. This growth has brought its total market capitalization to more than $5.8 billion, making it the 27th biggest cryptocurrency in the world.
However, whatever goes up must ultimately come down. In the past few weeks, the Decentraland price has crashed by more than 45%. This drop is mostly because of profit-taking. Historically, cryptocurrency prices tend to have a pullback after making a strong rally. This performance is mostly because of profit-taking.
Decentraland has also declined because of monetary conditions. In the past almost two years, the prices of all cryptocurrencies have jumped sharply. Many analysts believe that the policies of the Federal Reserve and other central banks have contributed to this sell-off.
Therefore, as the world economy recovers, central banks are considering tightening market conditions. The Fed is expected to leave interest rates unchanged but warn that it will hike them in 2022.
Decentraland price prediction
The four-hour chart shows that the MANA price has been in a bearish trend in the past few weeks. Along the way, the coin has formed a descending triangle pattern that is shown in black. A descending triangle is usually a bearish signal. It has also moved slightly below the 25-day and 50-day moving averages.
Therefore, there is a likelihood that the Decentraland price will likely have a bearish breakout as bears target the next key support level at $2.5, which is about 21% below the current level.
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