Decentraland ( MANA ) has had a lackluster performance over the past week. On-chain data shows that investors are increasingly fed up with the Metaverse project’s declining user acquisitions. Will whale investors dumping their bags trigger more MANA layoffs?
Decentraland is losing traction
Decentraland is an Ethereum-based virtual reality project that allows users to monetize their content creation and gaming experiences. The native token MANA is down 15% in the past 10 days. On-chain data reveals a connection between the recent price collapse and the continued decline in Decentraland’s user base growth rate.
The number of new users joining the Metaverse project has dropped dramatically since mid-January.
There were 1,069 new MANA addresses added in January. However, as of March 30, that number had reduced to 381, a 64% decrease in traction.
The decline in new users could be a sign that the Metaverse project is losing market share to competitors. While the price is only down 15% from the recent local high of $0.67 on March 18, the 64% decrease in new users could cause serious concern among crypto investors.
The recent sell-off by Decentraland whales further confirms this bearish outlook. Over the past month, a strategic group of crypto whales have been offloading large amounts of MANA.
After a month of declining growth, clusters of whales with balances of between 1 million and 10 million MANA began to deplete their holdings. The chart below shows that they sold 53 million tokens worth approximately $30 million between February 21 and March 31.
When crypto whales dump their tokens, it could scare the sharks and other retail investors into becoming bearish themselves. Notably, this group of whales represents approximately 33% of Decentraland’s total circulating supply. If they continue to drop packets at their current rate, it could severely impact the price of MANA.
MANA Price Prediction: A possible drop to $0.46
IntoTheBlock’s Global Money In/Out (GIOM) chart shows that with only 45.78% of MANA holders currently in profit, the Decentraland market is essentially bearish and could fall further. As shown in the chart below, MANA appears likely to lose current support at $0.55, the lowest price paid by 8,500 addresses for 132 million tokens. If this happens, MANA could free fall to $0.46, with an additional 20,700 addresses holding 303 million tokens available to provide support.
Still, bulls could seize the market if MANA breaks $0.60, the highest price paid by 8,500 resistant addresses for their 132 million tokens. Afterwards, MANA is likely to rebound towards the next significant resistance area at $0.70. In this area, 32,000 addresses holding 512 million MANA tokens may take profits.