Dash [DASH] rallied 20.48% in 24 hours, and its Open Interest was up by a whopping 55% for the day.
The token’s exciting short-term rally was likely driven by the enthusiasm around the privacy sector after Monero [XMR] reclaimed its position as the sector’s leader by setting new all-time highs.
Data showed that the spot demand was high in the past 24-48 hours, but Funding Rates were negative. This could set up a short squeeze scenario.
Assessing the long-term Dash trends
DASH’s price charts showed that the round-number resistance at $50 had rebuffed the buyers in the first week of December. At the time of writing, the privacy token prices were approaching the same resistance zone.
An earlier AMBCrypto report highlighted that a move beyond $50-$52 did not appear likely for the first week of January. The altcoin still lacked sufficient buying pressure to climb past this key local supply zone.
Though the OBV has been climbing over the past month, the trading volume was consistently below the 20-period moving average.
This was a warning sign to enthusiastic bulls to curb their bullish expectations until the token makes a breakout and the market shows its hand.
Is a bullish breakout likely?
A breakout beyond $50-$52 is possible, but betting on such an outcome could be risky.
The major reasons are the low trading volume on the higher timeframe charts and the bearish outlook after the drop below $40 in recent months.
Traders’ call to action – Take profits
The negative Funding Rate and the uptick in Open Interest and spot CVD suggested there was a chance of a short squeeze. This could take prices to $52 and higher.
A daily session close above $53.42 would be a sign of a momentum shift. If that happens, swing traders can shift to a bullish bias.
Until then, swing traders can remain wary due to the risk of increased volatility.
The final week of December saw the same conditions—high OI, spot CVD, negative funding, and a challenge of the $50 supply zone. That move failed to break out, and this one could, too.
Final Thoughts
- The bullish sentiment around Monero could be affecting traders and investors who are looking for the next undervalued privacy token.
- Traders should be wary of the gains over the past 24 hours. They can look to take profits at the $50 supply zone.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
