Key Takeaways
MNT has seen major liquidity outflows as its TVL continued to drop. The liquidity heatmap shows a unique path to a potential rally, backed by spot investors who placed $60 million in buy orders.
Mantle [MNT] has recorded one of its steepest declines in recent days, falling 9%. This followed weeks of strong performance where the asset gained 61.76% in just four weeks.
AMBCrypto’s analysis suggested that a further decline could occur before a potential full-scale rally, which may trigger another upward move for the asset.
Liquidity outflow on the rise
The decline in MNT’s value has been driven by investors shifting from a long-term perspective to a short-term market outlook.
In the past 24 hours, TVL fell by 2.22% to $231.06 million per DeFiLlama. This places the asset just $3.69 million away from reaching its lowest TVL point on record.
Source: DeFiLlama
A continued outflow of this scale confirms that investors are adopting a short-term outlook, which weighs heavily on the asset’s overall performance.
The derivatives market mirrors this trend. Contracts worth $13 million were removed in the past day as Open Interest fell, leaving $119 million in active contracts.
That’s not all. Volume in the derivatives market has tilted in favor of the bears. At the time of writing, the Taker Buy-Sell Ratio had dropped to 0.9324.
This sharp decline in both liquidity and trading volume signaled mounting selling pressure, with strong momentum driving it.
This suggests that perpetual market investors could be betting on the asset’s price falling further.
Can spot investors save MNT?
AMBCrypto’s analysis of the MNT market on CoinGlass showed significant buying pressure from spot investors despite the broader sell-off.
Over the past week, spot traders spent more than $60 million accumulating MNT, including $7.57 million in purchases within the past 24 hours.
Source: CoinGlass
This reflected an interesting dynamic: off-chain investors appeared willing to hold MNT in private wallets with a long-term outlook.
This contrasted with on-chain investors, who continued selling MNT for other assets as they adopt a shorter-term approach.
So far, the latest spot accumulation has not yet impacted price action. However, if purchases rise into the double-digit million range, they could potentially counter the selling pressure from derivatives and on-chain investors.
MNT’s fall could turn bullish
Despite the recent drop, AMBCrypto’s analysis showed that a bullish setup may still be in play.
At the time of writing, liquidity clusters both above and below the current price acted as magnets for further moves on the chart.
Source: CoinGlass
Given the prevailing bearish pressure, MNT may trade lower to clear liquidity clusters, which would eventually serve as demand zones for a rebound.
If this plays out, MNT could rally as high as $1.5, where the largest upper liquidity cluster is currently located.
