Dash experienced a significant drop of 12% after briefly reaching $96. This decline followed a substantial 130% weekly rally that ultimately failed to surpass the triple-digit mark. Current technical indicators and funding rate data suggest a potential downward trend towards the $60 price level.
Privacy Coin Rally Loses Steam
The cryptocurrency, commonly referred to as an altcoin, surged by nearly 130% throughout the past week. This impressive gain led it to a peak just shy of the $100 mark before encountering resistance.
The intraday high recorded on Friday was $96, which proved to be the apex of the rally. Subsequently, the token reversed its course and was trading at approximately $74 at the time of reporting. It is currently holding above the 61.8% Fibonacci retracement level, which is situated near $73.
Prior to this pullback, several warning signs had emerged. The Chaikin Money Flow indicator displayed a bearish divergence in the preceding days. This pattern was characterized by the indicator printing higher lows while the price of Dash formed higher highs, a typical indication of weakening capital support behind the price increases.
Furthermore, funding rate data revealed that short positions had outnumbered long contracts for nearly a week. This suggests that traders had anticipated a price decrease before the actual reversal occurred.
Technical Levels Remain Critical
The 61.8% Fibonacci level is a particularly important threshold for trend continuation and is often referred to as the bull market support floor. Its significance in market analysis cannot be overstated.
A confirmed break below the $73 mark would signify a transition to a bearish market structure. Analysts are closely watching the $60 level as the next significant support area, with the 23.6% Fibonacci level near $50 identified as a secondary target. However, if the token manages to rebound from its current levels and experience reduced selling pressure, it could lead to stabilization.
A decisive move above the $83 resistance level would indicate a resurgence of strength in the market. Such a development could potentially reopen the path towards the $100 price point.