Today we will have a look at DASH vs BTC on the daily log chart!
As you can see, since the highs in December we have been trading within the dashed down trend channel. On the 22nd and 23rd of April we tested the upside of the channel and managed to pierce through it; however volume was not enough and as we also had the EMA 200 to attend with directly above the channel - the resistance in this area was just too strong. This has sent us back down lower for a retest of the 50 EMA (which provided us with good support back on 21st and 22nd of April; and has subsequently held as support again).
Of particular note, is that we are currently in a smaller dotted uptrend channel within the larger downtrend channel , which has also acted as support thus far. Looking at the RSI ; although we have wavered slightly over the past few days, we have momentum building to the upside albeit not a lot of room left until we are oversold. The MACD is trending above the signal line and we can see some bullish momentum building here, which is a positive sign. Aroon Up is well above 50 (80.7) and Aroon Down is almost flat to the floor (2.5) indicating bulls have the edge here.
So what is going to happen next? We have basically have two scenarios unfolding and are at a critical and pivotal point. A break to the down side of the dotted uptrend channel will likely send us down to the green dashed support line. This is because if this scenario occurs it places us within a potential descending triangle which could ultimately send us lower, perhaps for a retest of the solid light green support zone which is very likely to hold. From here it is back for a test of the down trend channel for another break out attempt. I stress however, that this is the worst case scenario!
If we can however breakout of the long term down trend channel by tomorrows close at the latest (which momentum is suggesting we can); as well as break through the 200 EMA then we will have some serious new support here. This isn’t going to be easy and requires some serious volume to get us through this overhead resistance.
In terms of trading, I am waiting for a confirmation over the next two days as to which way this thing goes. If we can get the volume we need and break out of the long term downtrend channel and above the 200 EMA – then this is an excellent buy zone. We may go into a short period of consolidation after being exhausted during the break through, but we will have the down trend channel as new support and a bounce off here sees no real resistance until the 61.8% retrace. To be safe you could set stepped sell orders between the 50 and 61.8 fib levels for a decent profit from the buy zone.
On the flip side if we break to the down side of the smaller uptrend channel we are in, then I would be looking to see if the dark green dashed support line holds and a solid bounce off here could provide another breakout attempt through the top of the down trend channel. If this occurs then I would be placing a buy order on confirmation of the breakout. In this scenario, if the downtrend channel continues to provide resistance and the descending triangle actually forms, then we are likely to drop all the back down to the solid support zone before placing a buy order. Note: This is the worst case scenario that could possibly occur!
In summary I am 85% bullish that we can get the required momentum at least break through the top of the downtrend channel and confirm it as support, placing us within the buy zone.
As always DYOR and happy trading!
Cheers
