The Decentraland/Bitcoin pair (MANA/BTC) took out resistance of 1,230 satoshis on November 8, 2018. This triggered the breakout from the inverse head and shoulders reversal pattern on the 4-hour chart. The breakout looked strong as well. On that day, MANA/BTC generated volume that’s over 430% of its daily average. This sparked a rally to 1,462 satoshis on the same day.
Before November 8 closed, however, MANA/BTC started to show signs of weakness. It started to print a long wick on top of the 4-hour candle’s body. On top of that, the RSI was in extreme overbought territory. Also, it created a double top at resistance of 77 RSI. These are very good signals to start locking gains and that’s what we’re saw a few hours ago. Nevertheless, there may be a good chance to buy when MANA dips again.
Technical analysis shows that MANA/BTC is looking retest support of 1,230 satoshis. This pullback should give technical indicators time to cool off. More importantly, it helps the market create a new base of buyers. The new batch of bulls will be instrumental in the pair’s uptrend.
But first, MANA/BTC must complete the retest or else the breakout is not validated. We believe that bulls will be successful for a couple of reasons. First, 1,230 satoshis used to be a strong resistance. It was so strong that bulls needed seven attempts in three months to breach the resistance. Now that they’ve broken through, the firm resistance is flipped into durable support.
Second, we have the 21-day, 100-day, and 200-day moving averages crawling below the 4H candles. They will stand as additional supports to help keep the market above 1,230 satoshis.
The strategy is to buy the dip as close to 1,230 satoshis as possible. If MANA/BTC completes the retest, it will likely to launch a rally to our targets of 1,500 satoshis first and then 2,000 satoshis.
The process may take more than a month.
4-Hour Chart of Decentraland/Bitcoin on Binance
As of this writing, the Decentraland/Bitcoin pair is trading at 1,420 satoshis on Binance.
Summary of Strategy
Buy: As close to 1,230 satoshis as possible.
Target: 1,500 first and then 2,000 satoshis.
Stop: 1,150 satoshis.
NOTE: a satoshi is the smallest unit of Bitcoin, which equals to 0.00000001 BTC.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.