Decentraland price is set for a rally after breaking above the descending trendline
|- Decentraland price broke above the descending trendline, signaling a bullish trend ahead.
- On-chain data paints a bullish picture, with MANA's Exchange Flow balance showing a negative spike and the long-to-short ratio above one.
- A daily candlestick close below $0.258 would invalidate the bullish thesis.
Decentraland (MANA) price broke above the descending trendline and trades up 1.5% as of Friday at $0.291. Additionally, on-chain data support further price gains, as MANA's Exchange Flow Balance shows a negative spike, and the long-to-short ratio stays above one.
Decentraland price is poised for an upleg after breaking above its descending trendline
Decentraland price broke out of the descending trendline drawn by connecting multiple high levels from mid-March on Wednesday and rose 1% on Thursday. At the time of writing, it continues trading up 1.5% at $0.291 on Friday.
If the trendline breakout level acts as support around $0.280, its weekly support level, MANA could rise to $0.312 before potentially rallying by 25% to revisit its July 27 high of $0.351.
The Relative Strength Index (RSI) on the daily chart is trading above its neutral level of 50, and the Awesome Oscillator (AO) is approaching its neutral level of zero. Both indicators must trade above their respective neutral levels for the bullish momentum to be sustained.
MANA/USDT daily chart
Santiment's Exchange Flow Balance for MANA shows the net flow of tokens into and out of exchange wallets. A positive value indicates more MANA entered than exited, suggesting selling pressure from investors. A negative value indicates more MANA left the exchange than entered, indicating less selling pressure from investors.
In MANA's case, the metric has dropped from 781,450 to -935,390 from Tuesday to Wednesday, coinciding with a 5.6% price rise. This negative change indicates increased buying activity among investors.
During this event, MANA's Supply on Exchanges declined by 1% in one day, indicating investors are moving tokens out of the exchanges and holding them in their wallets, further denoting investor confidence in Decentraland.
MANA Exchange Flow Balance and Supply on Exchanges chart
According to Coinglass's data, MANA's Binance long-to-short ratio is 1.94. This ratio reflects bullish sentiment in the market, as the number above one suggests that more trades anticipate the price of the asset to rise, bolstering Decentraland's bullish outlook.
MANA long-to-short ratio chart
Despite the bullish thesis signaled by both on-chain data and technical analysis, the outlook will shift to bearish if Decentraland's daily candlestick closes below the August 17 low of $0.258. This scenario could lead to a 16% crash to retest its low of $0.217 on August 5.
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