Early May Update: Technicals
Just like we predicted in our last analysis, DGB is cemented in a descending channel and it loses value on daily basis. DGBBTC daily chart paints a bleak picture for DGB – it is stuck in a tight descending channel that started back in March. It is currently at 167 sats with good probability of sinking lower.
Considering that market is completely focused on bitcoin’s fight with the $6k height, altcoins are rotting on the racks and waiting for their season to commence. While that wait goes on, DGB and other altcoins slowly lose value to BTC and go back to their all time lows. Entering DGB right now would be a textbook example of “catching a knife” trading move as there seems to be a lot of room to travel downwards before hitting the support and rebound zones.
Our approach in situations similar to this one, would be a tiered entry position, where you buy a chunk at these prices and set other buy bids right above the significant support lines.
On the weekly diagram, DGB is dropped out of the descending triangle and the whole scenario played out like in a textbook. The descending triangle is a bearish formation that usually forms during a downtrend as a continuation pattern. There are instances when descending triangles form as reversal patterns at the end of an uptrend, but they are typically continuation patterns.
We could see a sharp drop to the 111 sats zone.
One thing to bear in mind is the turbulent and erratic nature of bitcoin – a sudden thrust up or slide down is always on the cards which would invalidate this and all other analysis and predictions. In such cases, market is shaken up with most traders exiting altcoins and entering bitcoin positions, especially in the initial phases of bitcoin…