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DASHUSD: After the drop, Dash moves inside the previous range. An opportunity to buy?


The big picture about DASHUSD is that it moves up in a wide and slightly upward channel, here represented by a linear regression channel. I am very fond of this type of channel representation because it delivers very useful information about its edges. The top one being +2 standard deviations above the center, and the bottom traced at -2 standard deviations below it.

In the 2H chart of this asset, we see that it has made a double top on April 30, and since then, it has behaved weakly until it made a low on May 11. Afterward, it recovered and created a short-term channel and created a triple bottom on May 21, 34, and 26. From there, it kept moving, making new highs inside the channel until the high of 82.2 on June 02. The asset experienced a drop on Tuesday, at the same time as the rest of the crypto market that sent it towards the previous trading range.

In the 2H chart, we see that the price has been holding by the short-term regression line (amber) after the bounce off the longer-term regression line. The technical factors give a slightly upward bias to this digital asset if the price gets up above the $78.77 line, as it will be above its 20-, 50- and 200-period SMA lines. Also, its price is slightly undervalued as compared to its long-term linear regression value. Thus, a bullish setup can be created with a buy-stop entry above $78.77, an invalidation level below its 200-SMA at $75.25, and an initial take-profit level at $83.36. That would set a 1.3 Reward/risk ratio, which is a bit short. To improve it, a trader could split the trade into two equal parts and let 50% of the trade run to a second profit target of $88.28, the last high made on April 30.

Key levels of the setup

Stop-buy: $78.77

Invalidation level: $75.25

Take-profit 1: $83.36

Take-profit 2: $88.28

Combined R/R: 2

Risk: $3.52 for each DASH coin purchased.

Reward: $7.04 for each DASH coin purchased.

Position size: 1.5 coins for every $1000 on a trading account would set the risk of the trade to 1 percent.

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Source: https://www.cryptorocket.com/news/dashusd-after-the-drop-dash-moves-inside-the-previous-range-an-opportunity-to-buy/
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