News of a $2.4 million sale of virtual real estate in Decentraland’s online universe caused a stir in the finance community on Wednesday. The sale marked the highest valuation ever placed on a virtual space. Whilst some traditional investors derided the news as further evidence of excess central bank liquidity fuelled speculative mania, members of the crypto community said it demonstrated the investment of investments in the non-fungible token (NFT)/metaverse space.
Decentraland is a decentralised metaverse built on the Ethereum blockchain that allows users to explore and interact with each other within a virtual environment, as well as to trade NFTs in the form of land and other virtual items.
Tokens.com, a publicly-traded company that uses its balance sheet to invest in digital assets, was named as the buyer. It will use the virtual space, which resides in the “Fashion Street” area of Decentraland, to host online fashion events and to sell virtual clothing.
MANA powers to fresh record highs
Tokens.com bought the virtual space for 618,000 MANA, the cryptocurrency used to facilitate transactions on in the Decentraland metaverse, which was worth slightly more than $2.4 million at the time. News of the purchase helped power MANA’s price to a fresh record high of nearly $6.0 per token on Thursday, having begun the week around $3.66.
The move saw MANA surpass its previous record high set back on the 30th of October at just under $5.0. However, short-term selling pressure has returned on Friday and MANA dropped back to test resistance in the $4.30 area.
Looking at MANA’s price action over the past few days, the cryptocurrency seemed to form a head and shoulders pattern. A break of the neckline, as well as of a short-term uptrend, seemed to trigger some technical selling. Should support in the $4.30s go, prices would likely fall back to test an uptrend linking the 10th, 16th and 22nd November lows, which would come into play as support before $4.0.
Interest in metaverse to keep MANA underpinned?
Elevated interest in the metaverse since Facebook changed its name to “Meta” on the 28th of October has been helping to keep the prices of NFT/metaverse-linked cryptocurrencies like MANA supported in recent weeks, despite a broader downturn elsewhere in the crypto market.
Despite the recent pullback from the record high set on Thursday (of now nearly 25%), MANA is trading with gains of more than 500% versus its valuation of under $1.0 per token on the 27th of October. According to google trends, interest in the term “metaverse” remains elevated at nearly 10x its pre-Facebook name change levels (though is down about half since the first week of November). Meanwhile, interest in the search term “NFT” and “Non-Fungible Token” continued to rise throughout November and only peaked one week ago.
As momentum behind the metaverse revolution continues to gather momentum, it would seem that there is significant room for further appreciation of MANA and Decentraland’s NFT real estate. For now, the space remains highly volatile, but for many crypto investors, it will be a case of buying the dip and then holding on for dear life.
This article was originally posted on FX Empire