After Segwit 2X was cancelled on Wednesday, November 8, DASH has continued to rally. From last week, the cryptocurrency has gained a whopping $342 and recorded highs of $593 on November 12. Even though there is a clear buy signal in the weekly chart, this move can be linked to the negative press surrounding BTC after Segwit 2X failed to take off. The point of contention revolves around network capacity and scaling problems which directly affects future BTC prices. Other than capacity, users want to settle payment immediately and cheaply. With DASH, scaling is a non-issue and payments can settled instantaneously. Furthermore, once quantum computing becomes a thing, DASH owners are rest assured of their privacy. And to take advantage of Segwit 2X failure, they released a 2MB block the same day through their DASH 12.2 update.
This is what cryptocurrency users want. Speed and potential of token appreciation.
Technically, given the pump, correction is bound to happen despite the strong buy signal in the weekly chart. Any correction is an opportunity to buy on dips. From the weekly chart, DASH prices tested $593 but has since shed more than $150 and continue to trend lower. Our first support level is at August highs of $410 and that is where reaction is expected after price tested the 161.8 Fibonacci extension level at $520.
Even though there is a stochastic sell signal in the daily chart, the irrational exuberance trait will take precedence and we recommend taking long set ups going forward. Until after scaling solution is found, capital will flow from BTC and DASH will continue appreciating. Ideal buy zone is marked around support zone between $410 and September 24 highs of $370. These same levels also coincide with 100% and 78.6% Fibonacci retracement levels.
In our entry chart, stochastics are turning from the overbought territory complete with a sell signal in place. Since we have identified potential buy zones at around $370 and $410, it will be wise if we wait until a buy signal is formed at or around those levels. First, the minor support trend line will determine if DASH will continue dropping lower. In case there is a breach, wait until a stochastics buy signal forms. Thereafter, a buy can be initiated after a bullish trend is confirmed by a bullish engulfing candlestick.