by Jamie Holmes
It looks as if some of the altcoin markets are gearing up for another bullish run, with DASH leading the charge. The price of DASH reached almost $600 on November 22 and set a new record high of $581 on the Kraken exchange.
Dash Breaks Above $500 for the First Time
There have been several explanations put forward for the sudden rise in the price of DASH; a possible deal in Zimbabwe, a feature newsletter the Palm Beach Confidential (which pumped other coins such as Zencash recently), or just the recent upgrade to a 2MB block size and the masternode system at work. Nevertheless, there seems to be a trend over recent months that DASH follows closely on the heels of bitcoin; once BTC-USD charges to a new all-time high, we have seen DASH follow on multiple times.
DASH recently announced work on an approach to on-chain scaling, with a move to 2MB blocks expected. The governance system saw masternodes vote on the proposal, which was adopted swiftly and in stark contrast to bitcoin’s tumultuous path to a scaling solution, which seems to be beginning to progress smoothly. While masternodes are part of the governance structure in DASH, they also serve another purpose.
You can run a masternode with 1000 DASH (valued around $560,000 at today’s prices), which means you cannot spend the cryptocurrency and must keep it locked up to keep the node running. According to Dash Masternodes Information, the return on investment is 8.74 percent per year. The upward trend of DASH-USD matches the growth in the number of masternodes increased generally over time, except for a few sudden drops. Of course, this could just be a spurious relationship.
With 4,334 masternodes operating at the time of writing, that takes out 4.334 million from the available coin supply of roughly 7.7. million; explaining, perhaps, most of the price action over the long term. Furthermore, Decred has displayed a similar dynamic; with increased participation in staking and voting over time, the altcoin has climbed from less than $2 during early 2017 to $38 at present. These alternative approaches to governance serve to strengthen the ecosystem and while they may never surpass bitcoin substantially, they are evidently of some value. Or you could argue they are part of a wider cryptocurrency ‘bubble.’
It seems that recent altcoin rallies are led by DASH. During mid-August, DASH-USD climbed from under $200 to a high of $412.77 in the space of two weeks or so. Other major altcoins started to make fresh highs during or following this period. And then again in early November, DASH-USD surpassed the previous high of $412.77 and eventually the $500 barrier. Other major altcoins like ether, ether classic and monero have neared all-time highs too recently.
DASH-USD Price Analysis
The weekly price action above shows resistances at $606.15 and $696.00, whereas immediate support lies at $460.77. Further supports are shown below using the bullish Marubozu candlestick, suggesting DASH-USD has plenty of room to the downside until bulls lose control. For instance, the market didn’t even reach the 50 percent level at $378.50 and limit buy orders could be profitable here over the long-term. Another support is found at the open of the candle, at $272.01.
A huge influx of volume from November 6 to November 12 preceded the bull run, with some profit taking on November 13 as the price tested the $400 handle. The momentum is strong as shown by the Awesome Oscillator but as bulls become exhausted, we should see the market settle near the fractal resistance (which has turned into support) at $494.53. If not, and we see the market continue, DASH should test the resistance at $606.15, as the market is in a bullish trend with the Ichimoku cloud green and fanning upward.