DASH/BTC Technical Analysis April 21 2017

 

By David Dinkins

Beginning in early February, the price of DASH entered a powerful upward trend, culminating in a price of .124. The price then fell to .085 and rebounded back to .118, forming a textbook double-top. The double-top was confirmed once the price moved below .085, and eventually it fell as low as .0345.

At .0345, the price rebounded powerfully (forming a wick). The body of the daily candle, excluding this wick, was about .0485. The price continued to move up from there before reaching resistance at .065 and dropping. DASH then touched support at .0485 again, signaling a potential double-bottom. Since the double-top reversed the upward trend and sent the price down, we were looking for a double-bottom to reverse the downward trend and move the price back up. The double bottom would be confirmed with a break of resistance at .065. The price bounced around this line for a few days, even wicking above it briefly, before falling off over the past several days.

About a week ago (the area left of the vertical yellow line), the chart had formed a descending triangle indicating the likelihood of lower lows. Just before the price could break down, Kraken announced that they were the long-awaited “major exchange” that the Dash Business Development Team had been working to integrate. The price immediately rallied, even though the underlying technicals didn’t support this rally. I’m not convinced that the market truly considered this price point as a “bottom.”

Above, I’ve zoomed into the 4 hour chart. Here you can see the perfect descending triangle. The technicals were pointing to further moves down, but “news” intervened and sent the price back up. Over the past few days, I’ve been asking myself whether the recent price action is going to be sustained, or is simply a temporary reaction to a major news event. DASH’s inability to break resistance at .065 leads me to believe that the trend, for now, is back down. I don’t think the market found a firm “bottom” on its own.

At this point DASH may drop back into the .0485 range and test support there. If support holds, DASH could form a triple bottom, which would be a powerful trend reversal indicator (assuming DASH then bounces up past .065 resistance).

The current 4 hour chart shows continuing declines with lower highs, forming a descending triangle that has now been broken to the downside. Further moves downward are likely at this time.

Key areas to watch:

  • Once support at .058 was breached, the move downward was not overly sharp. Watch the .058 – .062 area to see if the price moves back up into that range. There is powerful support around .06, and it’s not yet certain that the price will move further down. I think it’s likely, but not certain.
  • There is powerful support at .0485, and a bounce off that support could mean a potential bullish triple-bottom (assuming that resistance at .065 doesn’t cause any problems).
  • Finally, watch that all-important resistance line at .065, because if the price can sustain a move above that, then it will confirm a trend reversal and indicate future gains are likely.