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DASH Price Analysis – No mercy for holders this year

The markets have had no mercy for DASH holders throughout 2018, retracing the entire 2017 bull run over the course of the year.

DASH (DASH), otherwise know as Digital Cash, is a Bitcoin fork that was founded by Evan Duffield in January 2014. The cryptocurrency is currently sitting at yearly lows and down 96% from an all-time high established in December 2017. The market cap currently stands at US$539 million with US$150 million in trade volume over the past 24 hours.

Duffield is an American programmer based in Phoenix, Arizona, and currently acts as a strategic advisor for DASH Core. Ryan Taylor is the current CEO. The project was originally known as XCoin, rebranded to DarkCoin, and then renamed DASH in 2015.

DASH uses a two-tiered PoW (PoW) and Proof of Stake (PoS) consensus model. PoW mining verifies the ledger using a two and a half minute block time. PoS occurs through Masternodes (MNs) and serves higher functioning tasks including governance and unique sending features. The block rewards are currently split between three entities; 45% to PoW miners, 45% to the MNs, and 10% to the DASH treasury.

Only ~18,000,000 total DASH will ever be mined with block rewards decreasing by 7% per year until no rewards exist. Upon release in 2014, two million of the 18 million coins to ever exist were mined on the first day, which some have referred to as an ‘instamine.’ However, only 15% of the total circulating supply is currently held by top 100 accounts, a metric that is lower than Bitcoin, where 19% of the total circulating supply is currently held by top 100 accounts.

On the network side, hashrate and difficulty have both been at or near record highs since December 2018, although they have both decreased slightly in recent weeks. DASH uses the X11 hashing algorithm, which was developed by Duffield, and is comprised of the following hash functions: BLAKE, BLUE MIDNIGHT WISH (BMW), Grøstl, JH, Keccak, Skein, Luffa, CubeHash, SHAvite-3, SIMD, and ECHO. The X11 algorithm cycles through each of the 11 algorithms, in order, during the hashing process.

DASH can be mined by several Application-Specific Integrated Circuits (ASICs) currently on the market, including Bitmain’s Antminer D3. The AntPool and VIABTC mining pools currently account for 43.6% of the networks hashrate. Overall, mining profitability is currently sitting near an all-time low.

DASH Price Analysis 12 Dec 2018 (1)


Each DASH MN requires 1,000 DASH, currently valued at US$64,500, which acts as collateral during governance functions in order prevent Sybil attacks or "ballot stuffing." Despite the hefty price tag, MNs have continued to increase at a steady rate since 2015. There are currently 5,012 MNs meaning that 59% of the DASH circulating supply is currently held as collateral. The MN share of the block reward is split between all the nodes, meaning that as MNs increase, payouts per node decrease. MNs currently earn ~6.82% per year, but all MNs are also subject to DASH price volatility.

DASH Price Analysis 12 Dec 2018 (2)


MNs can send transactions using InstantSend or PrivateSend. InsantSend enables a type of off-chain 0-confirmation transaction which bypasses miners entirely. This is done through a transaction locking command with a wallet or client showing an intention to lock funds from a specific input to a specific output.

PrivateSend is essentially a coin mixing service, similar to CoinJoin, which combines identical inputs from multiple users into a single transaction with several outputs. For this reason, DASH is often labeled as a ‘privacy coin,’ along with Monero (XMR) and ZCash (ZEC). Although PrivateSend and mixed transactions (charts below) represent a low percentage of overall total transactions, these functions have been steadily increasing since 2015. The total number of private transactions on DASH are far fewer than that of XMR or ZEC.

DASH Price Analysis 12 Dec 2018 (3)


DASH Price Analysis 12 Dec 2018 (4)


The MN governance model also enables a decentralized voting mechanism for DASH related projects, paid for through the treasury block reward. DASH related projects, and their related budgets, are voted on by masternodes. Each project, if it passes, is added to the total budget and the person or entity doing the work is paid. While the mechanism has resulted in various projects being funded by the network, a substantial amount of proposals currently focus on marketing and promotion in South America.

Largely in part due to Duffield’s Arizona connection, DASH has also funded or has partnered with many Arizona based initiatives. In August 2017, the treasury set aside US$50,000 for Blockchain Research Laboratory (BRL) funding and in November 2017, DASH and Arizona State University opened a BRL at the university. In January 2018, DASH unveiled a US$300,000 initiative with ASU to accelerate research, development, and education in the blockchain field.

DASH Price Analysis 12 Dec 2018 (5)


The current number of total transactions per day on the network (line, chart below) has been between 5,000-10,000, excluding a stress test performed recently when transactions spiked heavily, with over 3.5 million transactions in one 24 hour period. The average transaction value per day peaked in June 2017 and has continued to fall from a high of US$65,000 since November 2017. The current average transaction value is ~US$2,000. Average transaction fees are currently sitting near pre-September 2015 levels at US$0.0124.

DASH Price Analysis 12 Dec 2018 (6)


The 30-day Kalichkin network value to estimated on-chain daily transactions (NVT) ratio (line, chart below) has begun to fall since reaching near 70. Inflection points in NVT can be leading indicators of a reversal in asset value. A clear uptrend in NVT suggests a coin is overvalued based on its economic activity and utility, which should be seen as a bearish price indicator, whereas a downtrend in NVT suggests the opposite. An NVT holding below 30 and falling would likely signify bullish market conditions.

Daily active addresses (fill, chart below) have continued to increase in the setting of several stress tests which have falsely elevated organic user numbers. Even still, active addresses increased significantly throughout 2017 and have remained near record levels throughout 2018. Active and unique addresses are important to consider when determining the fundamental value of the network using Metcalfe’s law.

DASH Price Analysis 12 Dec 2018 (7)


Turning to developer activity, over 155 developers have contributed a cumulative 1,024 commits to the DASH repos in the past year. Most of these commits have been in the DASH Documentation and the DASH website repo. The DASH protocol repo (shown below) has had 276 commits in the past year, with very few commits over the last half of 2018.

Most coins use the developer community of GitHub where files are saved in folders called "repositories," or "repos," and changes to these files are recorded with "commits," which save a record of what changes were made, when, and by who. Although commits represent quantity and not necessarily quality, a higher number of commits can signify higher dev activity and interest.

DASH Price Analysis 12 Dec 2018 (8)

DASH exchange traded volume has been led almost exclusively by the Bitcoin (BTC) pair with the majority of trading occurring on Custodial solutions for DASH include both Trezor and Ledger hardware wallets, as well as Abra, Electrum, and Jaxx mobile wallets. At the institutional level, BitGo has DASH support, with Coinbase potentially adding DASH for custody purposes in the near future.

DASH Price Analysis 12 Dec 2018 (9)

Technical Analysis

The markets have had no mercy for DASH holders throughout 2018, retracing the entire 2017 bull run over the course of the year. To determine entries and exits throughout a trend, as well as trend reversal, exponential moving averages (EMAs), volume profile, and the Ichimoku Cloud can be used. Further background information on the technical analysis discussed below can be found here.

On the daily chart, the 50/200EMA has been bearishly crossed since March 20th, with no candle closes above the 200EMA since this ‘Death Cross.’ The 200EMA will eventually act as a mean reversion target, currently at US$209. Price has also been bound by a tight downward channel, which has been almost a mirror opposite of the upward channel that brought DASH to record highs in December 2017. The volume profile of previous price action (horizontal bars, chart below) suggests the crucial support of US$94 has been breached with thinning support remaining. There are currently no active, high timeframe, bullish divergences.

DASH Price Analysis 12 Dec 2018 (10)

Turning to the Ichimoku Cloud, four metrics are used to determine if a trend exists; the current price in relation to the Cloud, the color of the Cloud (red for bearish, green for bullish), the Tenkan (T) and Kijun (K) cross, and the Lagging Span. The best entry always occurs when most of the signals flip from bearish to bullish, or vice versa.

The status of the current Cloud metrics on the daily time frame with doubled settings (20/60/120/30) are bearish; price is below Cloud, Cloud is bearish, TK cross is bearish, and Lagging Span is below Cloud and below price.

A traditional long entry will not trigger until price is above the Cloud. Price has not been above the Cloud on the daily timeframe since January. Two bearish TK crosses (red gavels, chart below) have both resulted in a 60+% drop. If price does not make lower lows, a TK C-Clamp may form, suggesting mean reversion to the Kijun at ~US$120.

DASH Price Analysis 12 Dec 2018 (11)

The status of the current Cloud metrics on the twelve-hour time frame with doubled settings (20/60/120/30) are also bearish; price is below Cloud, Cloud is bearish, TK cross is bearish, and Lagging Span is below Cloud and below price.

Again, a traditional long entry will not trigger until price is above the Cloud. Price has not been above the Cloud on the twelve-hour timeframe since September. If price does not make lower lows, a TK C-Clamp may form, suggesting mean reversion to the Kijun at ~US$115. Entries for these TK disequilibrium trades have the highest probability of success once price breaches the Tenkan (blue line)

DASH Price Analysis 12 Dec 2018 (12)

For the DASH/BTC pair, the trend has also been heavily bearish since February, with price below the Cloud for the entire time. The entire 2017 bullish rally has been re-traced at this point, and based on the historic volume profile from 2014-2017, price is reaching a strong support zone.

Again, a bullish entry does not occur until price closes a candle above the Cloud, but buyers may begin to enter based on the multi-year horizontal resistance turned support. Based on the inflation schedule alone, BTC will likely serve as a better store of value than DASH.

DASH Price Analysis 12 Dec 2018 (13)


Fundamentals suggest a network with very little active transactional use and very few private transactions, despite being touted as a privacy coin. Unlike other coins from the class of 2014, which have largely fallen by the wayside, DASH has likely survived due to both the MN and treasury component. MNs give DASH a use case which discourages a large amount of circulating supply to ever see the open market. The treasury has continued to fund DASH related development and marketing to sustain the coin over the past four years. Even with initiatives in Arizona and several initiatives in South America, the network is unlikely to see explosive growth in the near term.

Technicals show a strong bear trend throughout 2018, as is the case for most cryptographic assets. Litmus tests for a trend reversal include price position relative to both the 200EMA and the Cloud on the daily timeframe. Signs of weakening bearish momentum include a TK C-clamp with a mean reversion target of ~US$115. Overall, the bear trend will likely remain intact until price breaches the longstanding bearish channel.


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