DASH price skyrocketed as capital was converted into privacy coins and traders turned away from Zcash following the turmoil in corporate governance.
Key insights:
Dash (DASH) proved to be among the finest crypto market performers this week, with its price rising 125% to $79.60 on Wednesday.
DASH/USDT day by day chart. Source: TradingView
Why is DASH recovering so strongly now?
DASH particularly benefited from the capital rotation of rival Zcash (ZEC), last yr's top gainer within the privacy sector, after the Electric Coin Company's development team resigned because of governance disputes.
ZEC/USDT vs. XMR/USDT and DASH/USDT weekly performance chart. Source: TradingView
Monero (XMR) was the primary beneficiary this week, while Dash, historically the next beta privacy company, emerged as a catch-up trade for traders who missed Monero's initial breakout.
Top privacy coins and their hourly, day by day and weekly price trends. Source: CoinGecko
DASH also rose when the EU’s DAC8 directive got here into force on January 1st.
The government would require crypto service providers to gather and report user tax data, reigniting the narrative that privacy is a feature, not a bug.
DASH's rally also followed the network's partnership with Alchemy Pay, a move that expands access to fiat currencies on and off-ramp across greater than 300 payment channels in 173 countries.
Source: X
Can the DASH price rally proceed?
On Wednesday, Dash approached a critical technical turning point.
An extended-term chart tested a multi-year descending trend line that has capped every major rally for the reason that 2018 peak. Historically, previous rejections on this resistance zone have been preceded by brutal declines of 95% or more during subsequent bear cycles.
DASH/USD two-week chart. Source: TradingView
A transparent breakout and sustained hold above the descending trend line could open the door to a broader trend reversal, starting with a rally toward the 0.236 Fibonacci retracement line at around $125 by February.
However, failure would increase the danger of Dash's explosive rally overheating and set the stage for a pointy decline towards the token's descending trendline support since mid-2019.
To put it simply, DASH could fall towards $17 in the approaching months, a drop of around 80% from current price levels if history is any indication.
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