Mantle (MNT): Bulls face challenges as retail investor cash flow hesitates

Mantle (MNT) continues its bounce back, recording an increase of more than 2% on Thursday evening, continuing the upward trend from the previous session. The short term recovery is currently approaching a key resistance level, raising expectations for a strong breakout from the bulls. However, the caution from derivative traders indicates that a cautious sentiment still dominates the market, making the recovery path challenging.

The psychology of trading Mantle derivatives is volatile

Mantle is facing challenges in maintaining its appeal to derivative traders, as a wave of volatility in the cryptocurrency market spreads a cautious sentiment. According to data from CoinGlass, the open contract (OI) — an index reflecting the total nominal value of open futures contracts — of MNT has sharply decreased after the collapse on October 10, indicating that traders' confidence in Mantle's short-term bounce back ability is weakening.

As of now, the OI of the MNT futures contract is at 119.02 million USD on Thursday, a significant decrease from 158.26 million USD at the beginning of November.

Open contract of MNT | Source: CoinGlassAlthough market sentiment still leans towards risk aversion, the funding rate has now risen to 0.0099%, compared to -0.0009% earlier in the day, indicating that short term traders are beginning to be willing to accept higher fees to maintain long positions, reflecting a cautious growth in risk appetite.

The funding rate of MNT | Source: CoinGlass## Mantle could continue to rise if it breaks through the trend line.

The short term bounce back of Mantle (MNT) is gradually gaining momentum, although retail investor participation remains limited. The price is approaching a crucial resistance level on the 4-hour chart, formed by connecting the peaks on October 12 and 27 around the 1.3200 USD mark. Currently, MNT is still trading below the (EMA) 50, 100, and 200 period moving averages, all of which maintain a downward slope, reflecting the long-term bearish trend that still prevails.

In the event that MNT successfully breaks through this resistance level, the 100-period and 200-period EMAs around 1,3808 USD along with the psychological level of 1,5000 USD could become the next targets for the bulls.

MNT/USDT chart on the 4-hour timeframe | Source: TradingViewThe technical indicators on the 4-hour chart also support the likelihood of a breakout, as the MACD line is rising and converging with the signal line, indicating the potential for a bullish crossover.

At the same time, the relative strength index (RSI) is rising to the level of 50, indicating that buying and selling pressure is balanced. Once the RSI crosses this neutral level, the bulls are likely to take control.

On the contrary, if the recovery momentum of Mantle is not maintained, the price risks reversing to the support zone of 1.1631 USD, the lowest recorded on October 10.

SN_Nour