Falling wedge formation combined with upward trending RSI indicates a metaverse token market rally.
The metaverse index stands to post a 26% upside move against wrapped Ether.
Neutral RSI numbers invite buying action as Grayscale stokes a bullish outlook.
JAIPUR (CoinChapter.com) – Metaverse blockchain assets formed a technical setup that could lead them to print a 26% upside move. The bullish sentiment around decentralized virtual ecosystems picked up as institutional crypto fund manager Grayscale predicted a $1 trillion market cap for blockchain-based online spaces.
Top metaverse crypto tokens AXS (Axie Infinity), SAND (The Sandbox), Decentraland (MANA) already posted triple-digit gains in November owing to a considerable bump in adoption. And from the looks of it, it is just the beginning.
The decentralized metaverse market is the frontrunner in the “Web 3.0 internet evolution”, stated the latest Grayscale report. Head of Research David Grider and Research Analyst Matt Maximo opined that the burgeoning digital experience ecosystem “is still emerging.” But the critical elements are in place and are redefining media, entertainment, e-commerce, and real-estate.
“Projects like Decentraland are creating an open-world metaverse where users can log in to play games, earn MANA (the native token of Decentraland, with which users can purchase NFTs, including LAND or collectibles, and vote on economy governance), or create NFTs, giving them real-world interoperability for the value of their time spent in-game.”
The Metaverse, according to Grider and Maximo, “is a set of interconnected, experiential, 3D virtual worlds where people located anywhere can socialize in real-time to form a persistent, user-owned, internet economy spanning the digital and physical worlds.”
The Grayscale market research execs observed that metaverse cryptos collectively have a $28 billion market cap. But that’s paltry compared to social media giants such as Facebook ($900 billion), which recently rebranded to Meta. And the $2 trillion gaming industry, plus the $14.8 trillion Web 2.0 virtual space market.
A $1 Trillion+ Market Opportunity
However, the future outlook is bullish. Currently, gaming is the vertical that has picked up adoption in the Web 3.0 metaverse realm. Revenue from virtual gaming platforms was $180 billion in 2020 and could balloon to $400 billion in 2025. But the peer-to-peer online world’s applications extend far beyond gaming, the Grayscale researchers expressed.
“The Metaverse is estimated to be a trillion-dollar revenue opportunity across advertising, social commerce, digital events, hardware, and developer/creator monetization.”
That’s because users in the Web 3.0 Metaverse virtual worlds have grown to almost 50,000, which is a 10X upside from 2020 beginning. In addition, the total value spent on online blockchain-based worlds, such as virtual land, goods, and services, topped $200 million. Citing these numbers Grider and Maximo concurred that although the Web 3.0 metaverse is still in a nascent phase, with its current trajectory, the space will encounter explosive growth in the coming years.
“Web 3.0 Metaverse virtual worlds are creating real-world value for the developers, third-party creators, and users building these emerging market internet-native crypto cloud economies.”
Bullish Technical Outlook
While a $1 trillion valuation is still eons away, the metaverse market stands to chart a maximum of 26% growth in the near term. A falling wedge formation combined with an RSI uptrend confirms the same.
From a technical analysis perspective, wedge patterns occur in the final stages of an asset’s downward market moves. The upper and lower trendlines seem to converge, with buyers stepping in to arrest further price slides. Usually, an upside breakout above the upper trendline takes shape before the convergence.
As per the 4-hour Metaverse Index/Wrapped Ether (MVIWETH) chart, the virtual Web 3.0 token market could still slide further. But, if the current buying momentum continues, then a further selloff may not materialize. RSI points to oversold conditions, which explains the return of bulls.
A breakout from current levels could lead to a 21% rally for the metaverse crypto market. However, in the event of a further downward correction, the breakout scenario would remain. Further selloffs would lead to decentralized online world assets retesting the wedge formation’s lower trendline, followed by a nearly 26% bounce to an almost $40 billion market valuation.
Himadri is an active investor in cryptocurrencies and upcoming blockchain technology projects. He has been a part of the digital asset space since 2017 and has held multiple positions as Social Media Manager, Assistant Editor, Sponsored Content Manager, Cryptocurrency Journalist roles in reputed news outlets like NewsBTC, Bitcoinist and CryptoPotato. He has also helped numerous blockchain projects gain prominence through terse and succinct marketing/technical content. Himadri comes with a marketing and engineering background, and has worked with reputed names such as GE Healthcare, Volvo Trucks and Polycom before moving into crypto.