Decentraland’s MANA Token is Soaring: Be Careful!

Decentraland price has started the year well as gaming and metaverse tokens surge. MANA surged to a high of $0.43, the highest point since November. It has surged by more than 40% from the lowest level in 2022. Other gaming tokens that have surged are Sandbox, MOBOX, and Gala. 

Usage concerns remain

Decentraland is a leading blockchain project that makes it possible for people to buy virtual land, buy non-fungible tokens (NFT), and play games. At its peak, Decentraland had millions of users from around the world. 

During that time, people were willing to spend millions of dollars on virtual property in its metaverse. A company spent over $2 million to buy a parcel of land in its platform.

Recently, however, demand for the metaverse has faded because of the ongoing crypto winter. Data from multiple sources has shown that Decentraland’s metaverse has become empty. On a given day, there are less than 200 people in its ecosystem. As a result, the value of land and NFTs has dropped sharply. 

Decentraland is not alone. Meta Platforms has found it tough to profit from the metaverse. Recent reporting shows that most people who signed up to its platform’s metaverse are no longer active. 

Therefore, this week’s rebound of MANA price seems like a short squeeze rather than a genuine price action. It is also in sync with the price trends of other metaverse tokens like Gala. As I wrote on Monda, Gala price soared after the developers partnered with The Rock for two movies and shifted their model to mobile.

MANA price prediction

The daily chart shows that Decentraland price has been in a strong bullish trend in the past few days. It has managed to move above the 25-day and 50-day moving averages. The coin also rose above the important resistance level at $0.3395, the highest point on December 23. 

Oscillators like the Relative Strength Index has also continued rising. Therefore, I suspect that Decentraland will stage a major pullback in the coming days. If this happens, the key level to watch will be at $0.35.