After one month of consolidation-best checked in the lower time frames and mixed signals, price action finally broke below $950 and away from the $350 consolidation with clear upper limits at $1300. As it is, more than $600 worth of DASH value has been wiped and worse still, the future doesn’t look promising.
We mentioned how importance it was for price action to maintain its value above $800 and indeed buyers tried-as shown by that long lower wick from last week candlestick-but nevertheless, sell pressure was strong and despite waving in lower time frame, DASH is likely to depreciate further.
So, what will be our trade plan? The first instinct is to sell and ride with the correction where bumps is expected at the middle BB and $400. That is more than $300 away but with the average weekly range exceeding $200 in the last couple of weeks, we cannot completely shelve that proposition and might happen sooner than we think.
Secondly, since last week’s depreciation was above average with DASH losing exactly $500 after last week’s close, we expect price action to be muted just like it has been when such spikes happen.
I project bears to test $500 and the 1st Fibonacci extension line in the coming sessions and if there is an appreciation, it will be bound between the $650 and $1075.
In the daily chart, we shall be cognizant of the fact that buyers are in charge and we are in a correction as it is in the weekly chart.
DASH sellers will continue to be in charge as long as they remain below the middle BB and band along the lower BB. Despite the relentless sell pressure, support might be found at the 78.6% Fibonacci retracement level in the coming sessions.
If the double bottoms printed on January 16 and 17 is cleared today, then that means the minor support provided by the 61.8% Fibonacci retracement won’t be valid and that might open flood gate for further price pressures.
In our entry chart, we shall continue selling buoyed by the fact that the second phase of the bear break out pattern picked up from the 61.8% Fibonacci retracement level drawn from last week’s high lows. This level coincidentally is previous support now resistance as highlighted in the chart.
Besides the awesome combination, we can also expect last week’s lows to be cleared if this pressure continue. If prices bounce back, then the minor resistance trend line connecting January 7 and 13 highs will be our first layer of support.