Key Takeaways
The MANTRA (OM) price has fallen by 30% since reaching an all-time high of $8.99 on Feb. 23. This correction happened due to high profit-taking and intensifying selling pressure around the cryptocurrency.
However, on-chain data shows that OM might have landed in an undervalued spot following the decline. Whether the token will see a quick rebound or not remains uncertain.
In this analysis, CCN reveals what could happen to OM’s price as the broader market conditions start to stabilize.
OM Faces Possible Reversal
When OM’s price closed at $9 on Feb. 23, the Market Value to Realized Value (MVRV) ratio was 25.57%. The MVRV ratio indicates an asset is undervalued or overvalued relative to its fair value.
Historically, when the ratio drops below zero, the cryptocurrency is approaching an undervalued point. On the other hand, an extremely high value shows that the asset is overvalued.
According to Santiment, OM’s price decline has caused the 30-day MVRV ratio to drop to -3.92 %. Historically, whenever the metric hit this level, the cryptocurrency’s value bounced later.
Due to that, it is not out of place to mention that OM might be undervalued.
However, the position of other indicators will determine whether it will see a notable rise above $6 in the short term.
OM Price Analysis: No Clear Direction Yet
From a technical perspective, the OM/USD daily chart shows that the Chaikin Money Flow (CMF) has retained its positive above the zero signal line. This position indicates that buying pressure has outpaced distribution.
If this trend continues, the OM’s price will likely trade highly above $6 in the short term. Like the CMF, the Money Flow Index (MFI) reading increased, validating a possible return to the bullish phase.
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However, it is important to note that the CMF and MFI ratings are still close to their midpoints. As such, there is still a risk of a breakdown below the current market value.
But what happens when OM Bulls take bears out of the picture?
- Bullish scenario: In this instance, OM might refrain from dropping below the 0.382 Fibonacci level at $5.95. Should that be the case, OM’s price might climb to $7.16. If buying pressure intensifies, OM’s price might hit a new all-time high, possibly around $9.11.
- Bearish scenario: Should bears get the upper hand, OM’s price risks a decline below the $5.95 support. If that happens, the token could drop to the 0.618 golden pocket ratio at $3.99.
Disclaimer:
The views, thoughts, and opinions expressed in the article belong solely to the author, and not necessarily to CCN, its management, employees, or affiliates. This content is for informational purposes only and should not be considered professional advice.
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