Mantra (OM) is one of the few tokens in the green amidst the crypto market downturn. Its recent surge appears driven by key developments, with its sustainability in question.
Partnership with MAG
The primary reason for Mantra’s recent performance is a significant partnership announcement. On July 3, UAE real estate giant MAG partnered with Mantra to tokenize $500 million in real estate assets. This announcement brought positive sentiment towards Mantra, propelling its price by 31% in just eight hours. However, such increases are often unsustainable, with Mantra already dropping by more than 18% within a day.
Market Outlook and Bitcoin’s Influence
To understand Mantra’s potential movement, it is crucial to consider Bitcoin’s price trajectory. Recent analysis suggests Bitcoin might drop to the $50,000-$52,000 range. At the time of writing, Bitcoin had already fallen to around $53,500.
If Bitcoin’s price drops further, the entire crypto market will likely follow. Historical data shows market movements often align with Bitcoin. Therefore, investors should avoid long positions on Mantra to prevent the risk of buying into a declining market.
Technical Analysis: Fibonacci Retracements and Support Levels
Analyzing Mantra using Fibonacci retracements provides insight into potential future movements.
- Short-term analysis: Mantra’s recent price used the 78.6% Fibonacci retracement from the June 24 to July 5 range as support. If Bitcoin holds its current levels, Mantra may consolidate around $0.75.
- Downside risk: If the market declines further, positive news about Mantra may not sustain its price, potentially dropping to historical support levels of $0.652-$0.683.
Strategic Considerations
When assessing tokens deviating from typical market movements:
- News Impact: Determine if the news driving the token’s price is significant enough to counteract broader market trends.
- Market Absorption: Assess whether positive news can absorb market downturns or if the token will follow the overall market decline.
Shorting Mantra from its current price point to the $0.652-$0.683 range appears strategic. This trade relies on Bitcoin dropping further. However, it remains high-risk due to potential bullish reversals or new positive announcements for Mantra.
In conclusion, shorting Mantra might be rewarding, given current market conditions and Bitcoin’s projected decline. Investors should weigh the risks carefully.
Disclosure: This article does not represent investment advice. The content and materials featured on this page are for educational purposes only.
