Dash (DASH) Is Stuck In Persistent Stagnation

July 16, 2020   Dash

Dash (DASH) remains among the most disappointing top altcoins, along with Ripple (XRP) and Litecoin (LTC), that have proven unable to strive after the market crash. Over the past six months, Dash managed to travel all the way from macro resistance at $40 to the local high at $133 and back in a U-turn that must have frustrated both holders and reluctant traders. The coin did recover to the price level at $86 that preceded the infamous Black Thursday but was unable to surpass that resistance, which led to the dismantlement of the entire structure of that short-lived minor uptrend.

1-year DASH/USDT chart

DASH chose not to be the part of the altcoin rejuvenation

For the past two months, Dash has been sliding down quietly from $86 to $71 in an accurate descending channel that is somewhat reminiscent of Bitcoin's latest price action. The chart below confirms the correlation between the price movement of these two coins, although Dash has had its share of losses in the pair with BTC starting from the tail end of April. 

DASH/BTC comparison chart

It is obvious that DASH has been stagnating while many fellow altcoins went all-out bullish that even spurred the talks about the commencement of yet another altseason. It could be partially explained by the constant slippage of DASH's mining profitability.

DASH mining profitability chart

The chart clearly shows that despite the partial recovery to $18 for 1 THash/sec, the profitability of DASH mining is once again near the all-time lows at $7 for THash/sec, which serves as one of the primary reasons of the coin's poor performance. It was accompanied by a substantial $100 million drop in market capitalization that only adds salt to injury.

On the flip side, there are also no evident prerequisites for a sharp price drop, unless caused by external factors, for instance, the second wave of a global pandemic.

1-day DASH/USDT chart

  • Unlike the price action, the Accumulation/Distribution indicator has been rising, first sharply than steadily, to the accumulation extremes, hence forming an enormous bullish divergence on the daily time frame which hints at the possibility of the intentional repression of price on the part of big traders in order to obtain a larger position. If that is the case, retail traders must keep an eye on the support at $60.89 that could serve as a pivotal point;
  • The Ichimoku Cloud indicator reveals the current dominance of sellers in this market, judging from the way the price failed to leave the descending channel despite having substantial support from buyers (depicted as a green cloud). The position of the red cloud tells us that the sellers are applying increased pressure, which confirms our DASH price prediction regarding further price decrease to $60.89; 
  • MACD has been visibly bullish on the back on the corresponding crossover, but it was rejected at the zero line when the price has once again failed to break the channel resistance. The MACD crossovers work well in this market, so the current preparation for the bearish crossover also confirms the expectation of price depreciation.

DASH is gearing up for another gradual 15% drop that should occur over the next two weeks. But the test of support at $60.89 mustn't be interpreted as a buy signal because there is a high probability of a bull trap that could force a deeper price drop before a sharp reverse if the bullish divergence on A/D indicator plays out.

Author: Alex Paulson for Crypto-Rating.com

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