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After a brief rebound last week, another 5% price correction has seen Decentraland (MANA) price retest $0.35 on Monday Aug 7. With Yield Guild Game’s (YGG) climbing 350% and entering a new gear, it appears play-to-earn (P2E) investors are now dumping MANA.
While YGG price pumped 270% over the past three days before it saw a steep price correction on Monday, legacy P2E platform Decentraland (MANA) is now at risk of suffering another major price slump. On-chain data suggests that new P2E gamers have been opting for other platforms that currently appear more profitable.
Gamers Have Continued to Stay Away from Decentraland in August
Toward the end of July, Decentraland suffered a significant downturn in the user acquisition rate. On-chain data from Santiment reveals that the trend is yet to abate. As depicted below, Decentraland Network Growth had dropped by 73% from 782 to 209 new wallet addresses between July 24 and August 6.
Essentially, Network Growth measures the user-acquisition rate by aggregating the number of new wallet addresses created daily. This gives a rough estimate of new users joining the Decentraland GameFi ecosystem.
Compared to previous months, the chart above shows that Decentraland has not attracted substantial Network Growth since the start of August.
Hence, the native MANA token could struggle to find sufficient to propel it out of the current downtrend. The bearish momentum could worsen if investors continue to dump Decentraland for other gaming platforms.
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Bulls Are Getting Prepared to Defend the $0.35 Support Territory
Amid the growing negative price momentum, the bulls have been making strategic moves to defend the $0.35 support level.
The Exchange Market Depth chart shows that the bulls have mounted a formidable buy wall to prevent the MANA price from slipping below the critical $0.35 level.
Indicatively, the bulls have now placed active orders to purchase 6.73 Million MANA tokens around the current prices. Meanwhile, this far outweighs the 4.43 million MANA sell-orders that the traders have opened.
The Exchange On-chain Market Depth shows traders‘ current volume of aggregate buy and sell limit orders recently placed across recognized crypto exchanges.
As seen above, there is an excess market demand of more than 2.3 million MANA tokens. Meaning that investors dumping Decentraland may not have a damaging impact on MANA price.
In conclusion, the excess demand could provide sufficient support to soak up the growing bearish pressure on MANA. Hence, MANA could experience a largely neutral price action in the coming days.
MANA Price Prediction: The $0.34 Support Level Could Be Critical
Given the on-chain indicators highlighted above, the $0.34 support level could be critical for MANA bulls. As seen below, 1,630 addresses had bought 47 million MANA at an average price of $0.34. They could offer strong bullish support as they desperately avoid slipping to a net-loss position.
Yet, the Decentraland bulls have a fair chance of triggering a rebound if MANA can surge above the $0.40 range. However, the 2,550 holders that bought 36 million MANA at the maximum price of $0.37 could keep the price trend neutral.
But if the bulls can flip that resistance, MANA could head toward $0.40.