How $14 Million in Spot Buys Might Stabilize DASH After a 17% Price Drop

DASH has seen a significant decline of 17%, dropping to $67.07, largely due to outflows in the derivatives market. However, retail investors continue to purchase DASH, with over $14 million spent this week, indicating strong interest in the asset despite recent price drops. This article explores the reasons behind DASH's price fluctuations and potential future movements.

Key Takeaways

DASH [DASH] has experienced a sharp loss of 17%, with its price now at $67.07, following one of the largest outflows in the market.
Perpetual traders have contributed to this bearish trend, especially after a substantial monthly rise of 50% in DASH's value. However, there is still an ongoing influx of retail investment from the spot market.

How $14M in spot buys could save DASH's price after falling by 17%

Analyzing DASH's Price Decline

DASH’s recent price drop comes at a peculiar moment when the privacy-oriented cryptocurrency sector is growing, marked by an 85% increase in growth rate. The decline is attributed to substantial capital being diverted to the derivatives market, with approximately $66.84 million being primarily driven by sellers at the time of this report.

This situation is further emphasized by a negative funding rate, indicating that sellers have been covering funding fees to maintain their positions in both the spot and futures markets.

was OI weighted funding rate

Source: Coinglass

As of now, the Open Interest-Weighted Funding Rate, which serves as an indicator of overall market sentiment, has also become negative. This points to sellers dominating the current price trend of DASH. If such selling pressure continues, it may prompt DASH to slide further down, potentially resulting in liquidations of additional open positions.

DASH's Potential Direction

According to AMBCrypto's assessment, DASH may face further drops in price. Currently, DASH appears to be trading within a key demand zone, ranging from $61 to $67. Typically, this area could act as a support level; however, weak momentum raises concerns.

If selling pressure strengthens, DASH might approach the next lower demand zone, which lies between $42.15 and $51.28. Historically, this zone served as a consolidation area for about 16 days before the price broke through.

DASH price chart

Source: TradingView

Interestingly, the Money Flow Index (MFI), which gauges capital inflows and outflows, indicates that liquidity may be trying to re-enter the market. The MFI is trending upwards, currently at 39.70. However, until it rises above the bullish threshold of 50, any rebound will remain unconfirmed.

Increased Demand from Spot Investors

Spot investors have demonstrated significant interest in DASH despite the recent price fall. This week alone, these investors have collectively spent over $14 million to purchase DASH from the market. In the last 24 hours, buyers acquired tokens worth around $2.55 million.

DASH spot exchange netflow.

Source: Coinglass

The level of purchasing occurring during this market decline indicates that investors perceive this situation as a chance to accumulate for long-term positions. If this trend of buying persists, DASH may rebound from its current support zone, gradually moving towards higher price levels on the chart.