From yesterday’s open at $141 the price of Dash has increased to $188.9 which is an increase of 33.9% and is still increasing exponentially.
As the price is in an upward trajectory rapidly increasing, in today’s analysis we are going to look how much room for growth does the price have and examine the longevity of the current recovery.
Looking at the DASH/USD daily chart I have labeled the correction as three consecutive intermediate degree correction structures from the all-time high at $1425 to the lowest recent point at $132. First is a WXYXZ correction, second is the WXY in the opposite direction, and the current one I have labeled as a WXY for now, and I say for now because this current structure looks like it’s not developed fully.
As you can see the RSI is around the middle of the range standing at 57% which is a neutral sign but it definitely indicates that the increase in price that we are currently seeing is not resulted by the oversold conditions and the price can go both ways from here.
Zooming into the 4-hour chart I have further examined and labeled the current wave structure and as you can see the first impulse to the downside is the corrective wave W followed by the minor wxyxz correction which is the wave X of the intermediate count and then another impulse to the downside occurred which I consider being a Y wave.
As RSI is showing overbought conditions on the 4-hour chart we are now likely going to see a retracement and depending on the percentage depth of that retracement we are going to conclude if this is the start of an uptrend as the corrective wave Y ended or will the current correction be prolonged with two more waves X and Z which I personally think it’s going to be the case because this last intermediate wave X is not even above 32% of the Fibonacci retracement calculated from the high at $544 of the last wave structure to the low at $139 and it usually end between 50%-61.8%.
The hourly chart doesn’t say much but we can see that the price action has formed a bull flag from which the price broke out of but was stopped out at minor range horizontal resistance around $189.
RSI on the hourly chart is hovering around 70% mark above which it is considered to be an overbought zone as it went to 91.2% at its peak today.
Zooming further down into the 30 min time frame we can see that the impulsive wave ended with a bull flag correction from which the price broke out to the upside. After a breakout, the price was stopped at the minor range resistance which correlates with the 0.362 Fibonacci extension level.
My projected scenario is that this minute abcde correction is not a correction before a trend continuation but just the first correction in the line that will push the price down to the descending channels resistance to retest it for support. The main reason why I don’t think that the price is going further up is the last red candle.
As you can see the last red candle has pushed the price back to the levels of the first retracement which is why another impulse wave 12345 count would be invalid considering the rules of the Elliott Wave Principle count – the wave 4 cannot enter the territory of the wave 2.
This is why I am expecting something like this – and abcde, abc in the opposite dirrection and another abc to the downside to around $158. As you can see another red candle to the downside has appeared since I have started writing this article on the 30 min chart on the 0.236 Fibonacci extension level.
The last, minute C wave that I have labeled as the end of the minor wave 2 will validate if this is the start of an uptrend or just a recovery before new lows.
Zooming out to the 4-hour chart again you can clearly see what I mean as I have projected two potential scenarios.
In this bullish scenario, the last intermediate Y correction wave ended and with it the whole correction that resulted in a 92% decrease from the all-time high, and we are seeing the start of the first impulse in a developing uptrend.
The second bearish scenario the current intermediate correction is extended by two more waves and the price will go further down potentially to the $37 where the next strong horizontal support level is.
The validity of the projected scenarios will be validated by the current retracement – if the retracement finds support on the descending channels resistance and price going all the way to the 0.5 Fibonacci level around $340 I would consider that the uptrend has begun, but buy the looks of the chart I think that the second scenario with two more waves ending further down is more likely.