Decred (DCR) Price Tests $55 Amidst 60% Staking Supply Constraints

Decred (DCR) Price Tests $55 Amidst 60% Staking Supply Constraints – What's Next?

Decred (DCR) is on the verge of a potential breakout after regaining important support levels. The cryptocurrency has been consolidating within a symmetrical triangle after a rally in early November, with current market conditions showing mixed signals. High staking levels are contributing to a tight supply, which could influence future price movements.

Key Takeaways

DCR approached a triangle apex, maintained critical support at $22, and demonstrated increasing Bull Bear Power (BBP)—a scenario that typically hints at short-term breakout potential.
Weakness in the Spot Taker CVD and excessive Spot Volume indicate ongoing distribution in the market.
After bouncing back and tightening within a symmetrical triangle, Decred (DCR) aims for a breakout, with potential upside targets around $55 and $70.

Decred [DCR] faces a breakout test as bears fight back

DCR Price Approaches Breakout Zone

The price of DCR has been trading within a symmetrical triangle, a pattern that emerged following November's price rally. It has successfully remained above the critical support level at $22, which is considered the last higher low before the upswing. Furthermore, since flipping the SuperTrend indicator to a bullish state on November 9, the asset has maintained this upward momentum.

Additionally, the Bull Bear Power reading of 3.07 indicates that buyers have been active over the past three days, further amplifying the probability of an early breakout as the triangle’s apex approaches. The immediate upside target is positioned around $55, coinciding with the triangle’s upper boundary. If a clear breakout occurs above this level, it could lead to further gains towards the $70 mark, the highest level achieved this month. Conversely, if the price falls below this threshold, it could negate the bullish trend and reveal potential declines toward $22 or even lower.

DCR Source: TradingView

Insights from On-Chain Data

The on-chain metrics present a mixed outlook, leaning towards bearish sentiments. Data from CryptoQuant reveals that bears have retained control over the Spot Taker CVD for the past three months. However, this bearish trend has primarily been driven by retail traders, who seem to be purchasing DCR at the highs, only to see the prices decline shortly after.

Moreover, the Spot Volume Bubble Map indicates significant ongoing distribution, suggesting that while DCR's price is falling, trading volume is unusually high, signaling potential panic selling among retail investors.

Decred Source: CryptoQuant

While some metrics highlight bearish tendencies, there are still positive fundamentals at play.

Is a Breakout on the Horizon?

The Quantify Crypto tool currently reflects a neutral technical score, indicating a slight decline from the previous bullish stance. The short-term timeframe shows bearish signals, while the 15-minute interval reads at 54, suggesting slight bullish activity. Longer timeframes, however, exhibit positive momentum.

DCR Source: Quantify Crypto

With a circulating supply of 17.12 million DCR, approximately 60% of which is staked according to Decred statistics, the high staking rate enhances network security and continues to demonstrate demand for the asset. Currently, DCR presents a slightly bearish inclination while navigating a period of consolidation. Such consolidations can often lead to market reversals, yet the prevailing negative sentiment from on-chain activity presents a cautionary note. A decisive break in either direction would require confirmation to determine the next steps.