DigixDAO, the gold-backed ‘stablecoin’ based on the Ethereum blockchain, is holding true to its claim, with an 11.78% gain against its BTC amidst the red market today.
Ahead of Tether and Binance Coin, DGD takes 1st place as the best performer inside the top 50 cryptocurrencies by market capital, over the last 24hrs.
With BTC still battling to hold above $8,100 it is becoming more evident that bullish market sentiment is waning, as money pours out of volatile cryptocurrencies into these safer, more predictable pegged-value assets.
But since DGD is used to hedge against the market, is the token’s recent bullish performance, a bearish sign for the rest of the market ahead? Who knows, but let’s take a look at where we can expect DGD to go next.
Over 4hr candles we can see that DGD is entering into the bullish phase of a falling wedge pattern, after suffering a long bearish decline from its peak at the start of March, where the token value exploded 167% from $220 on February 14th, to $589 a fortnight later.
As the crypto market began to recover from the market crash mania we all witnessed over Q1, money was pulled out of DGD and put back into the more volatile assets, to capitalise on the big rebounding price actions; kickstarting the token’s decline.
After finding strong support along the 0.618 fib level (at 0.029BTC) throughout the entire length of April, DGD experienced a sudden dip as Bitcoin’s price began to edge toward $10,000.
Now however, we can see that as uncertainty builds around Bitcoin again in today’s market, DGD is beginning to position itself for a bullish breakout, after finding the bottom at 0.022BTC.
Looking at the chart above, it’s clear to see that DGD adheres very strongly to the fibonacci resistances, where upon passing down below each level during the long downtrend, the price action attempted a breach (blue circles) each time but with little to no success of breaking beyond.
Going forward, this gives us a clear indication of where we’re likely to see future selling pressures as the asset begins to recover its Q1 losses.
Diving into the current price activity we can see promising signs of an uptrend forming, with the 50 EMA (blue) beginning to curve upward, toward the 200EMA (red). As always, once this crossover happens with good volume levels, we should expect a strong bullish uptrend to ensue.
Over 30min candles, MACD briefly retraced back down to the signal line during a brief bearish period, but is now converging over the slower moving average as buying momentum picks back up.
RSI isn’t telling us much thus far apart from an earlier overbought moment during DGD’s opening bull run off the base support.
Ichimoku indicator is looking very bullish for DGD, with the price action passing up cleanly through the kumo cloud, along with a positive T/J -Sen crossover.
The Accumulation/ Distribution indicator however, is looking a little worrying though. In the last 2 hours, there’s been a significant drop in money flowing through the asset.
This could be one of two things, either bull traders are uncertain which way the market is about to move and are choosing to cash out from the recent DGD pump to put back into other assets, or, volumes are starting to thin out in preparation of a strong breakout; typically characterised in trading as the ‘calm before the storm’.
DigixDAO (DGD) Price Predictions
Once DGD breaks clear of the upper sloping resistance (yellow dotted line) we should expect the token to begin climbing. These targets will be heavily dependant on BTC’s performance throughout the rest Q2, and will likely fail if Bitcoin regains support. If BTC falls below $8,000 however, then we are very likely to see DGD reach these goals.
From the 0.024BTC level, our first price target for this predicted bull run is set at 0.618 fib level at 0.0295BTC, as the token continues to rebound off the base support. This gives us a 21.88% ROI on the token’s current value.
From there, we’d hope to see a return to the 0.5 fib level at 0.034BTC which was a top price point for DigixDAO over the course of its earlier April activity. This would deliver a 41.67% return.
If we see the overall crypto market dip further as we saw throughout February and March this year, then DGD could make additional gains toward the 0.382 fib level at 0.038BTC, as investors flock to this stable, pegged coin for safety, to ride out the storm. A retracement to this level would deliver a very promising 60.83% return.
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