Trade Recommendation: Dash
Dash (DASH/BTC) printed a fresh yearly low of 0.01764925 on December 7, 2018. At that price, the market has lost over 78% of its value from the 2018 high of 0.0818. Compared to other altcoins, this year’s bear market has been kinder to this crypto. At 78% devaluation, we are starting to see signs of short-term reversal.
Technical analysis shows that DASH/BTC may have established a short-term bottom as it recovered parabolic support of 0.02015. This price point used to be the market’s heaviest resistance. From May 2014 to February 2017, Dash struggled to stay above this level. When it finally traded above 0.02015, the market catapulted to as high as 0.1241568 in March 2017.
With this price action, the former three-year resistance is now the market’s most durable support. That’s why it was surprising to see Dash slicing through this support earlier this month. Nevertheless, the recovery of this support on December 20 shows that the breakdown is most likely a bear trap. A successful retest of 0.02015 will confirm our view.
In addition to the recent bullish price action, technical indicators affirm our view. The weekly RSI is flashing a bullish divergence while in near oversold territory. We can also see a bullish divergence on the daily RSI. These signals suggest that bulls are starting to make their presence felt.
The strategy is to buy as close to 0.02015 support as possible. As long as bulls stay above this level, Dash will likely bounce to our initial target of 0.02648442. Take that out and the next target is 0.0329.
The process may take less than a month.
Daily Chart of Dash/Bitcoin on Poloniex
As of this writing, the Dash/Bitcoin pair is trading at 0.02269873 on Poloniex.
Summary of Strategy
Buy: As close to 0.02015 as possible.
Targets: 0.02648442 and 0.0329.
Disclaimer: The writer owns bitcoin, Ethereum and other cryptocurrencies. He holds investment positions in the coins, but does not engage in short-term or day-trading.
Featured image courtesy of Shutterstock.