A couple of strong fundamentals has pushed Decred value up by 34 percent.
The DCR/USD rate on Tuesday touched new weekly highs at 50.97-fiat on Binance. The pair underwent a sharp bull run – more like a pump – as traders went on a buying-the-highs spree. It is now developing a range level between 47.27-fiat and 50.15-fiat to consolidate sideways before deciding on its further action.
The Decred team on October 15 announced that they are beginning to develop Politeia, a proposal system, on its mainnet. The major highlight of this proposal is the distribution of 570,000 DCR tokens – almost $27.5 million at the press time – among the project’s stakeholders. By doing so, each stakeholder gains the right to propose, discuss, collaborate on, and fund new projects, initiatives, and consensus change on Decred mainnet. It explains why the demand for DCR tokens has surged in the crypto market, leading to the said surge.
At the same time, Decred has opened itself to the wrath of wrong participants. The team acknowledged in its announcement that if stakeholders use Politeia unwisely, it can have severe consequences for the project’s development.
“It is important to understand that Politeia is a [potent] tool: it can enable all manner of positive developments for Decred, but if used unwisely, it can lead to a wide variety of problems,” read the caution.
Decred has lagged so far behind the other, marketing-friendly blockchain projects. The team has been very modest with its spending structure, prioritizing development over other tasks, and spending as little as $2.8 million from its Treasury fund since its ICO’s closure.
The Politeia announcement, therefore, didn’t cause the uptrend immediately owing to lack of media coverages. The DCR/USD rate went up only after Binance, the world’s leading crypto-to-crypto exchange decided to add the cryptocurrency to its portfolio.
DCR trade volume picked speed right after the listing, hitting as much as $6 million on a jump from a meager $600k. The upsurge was collectively noted at Binance, Bittrex, Huobi, Upbit, and other crypto-exchanges.
The DCR rally is impressive but also opens a floodgate of sellers willing to close their positions on stronger intraday profits. An overlong consolidation period between the range, as mentioned above, could excite bears. The crypto market has witnessed similar cases during the uptrends of coins like XRP, Tron and – even – Bitcoin.
Technically speaking, a further bull trend could be confirmed if DCR/USD attempts a breakout action above 50.15-fiat. Should it happen, a long position towards 52.55-fiat, August 4’s lower high, would be an ideal upside target. Unless, the medium-term sentiment for DCR, like every other cryptocurrency, remains bearish.
Featured Image from Shutterstock. Charts from TradingView.
Last modified: May 20, 2020 3:42 PM UTC