Decred (DCR) prices soared as much as 45% on April 18, before paring some gains, as traders bet on a major hard fork that aims to head off pump-and-dump schemes. (pumping and unloading) by the miners.
Decred network key update in three weeks
The DCR rose almost 45% to exceed $86 in one day, its highest level in four months. Besides, the huge move higher was accompanied by an equally huge increase in their trading volumes, confirming that most traders supported the intraday bullish momentum.
Traders flocked to buy Decred ahead of a key update scheduled for early May that would reduce the DCR mining reward fee to 10% from the current 60%.
The update comes in response to a community vote that agreed to limit access to Decred from “malicious miners,” meaning those with a history of artificially pumping and dumping DCR.
Besides, the community agreed to increase the rewards for Decred’s proof-of-stake (PoS) validators—entities that validate blocks submitted by miners—from 30% to 80%, suggesting that the consensus wants to move primarily from proof consensus -of-work (PoW) to consensus governance on-chain PoS.
pow and pos both have notable strengths, but we have found that the typically-overlooked risk of a mining cartel suppressing markets with its inventory is a massive downside to pow.
the revolution will not be suppressed #decred
— Jake Yocom-Piatt (@behindtext) April 14, 2022
Both pow and pos have notable strengths, but we have found that the often-overlooked risk of a mining cartel suppressing markets with its stock is a huge drawback for pow.
the revolution will not be suppressed
In a nutshell, Decred users would be incentivized to lock up their DCR for a certain period, thereby reducing their active supply from the market, potentially bolstering the price.
“DCR lock reward change is in 20 days”, he pointed Permabull Nino, an independent market analyst, saying that should be the reason for traders to watch the Decred market closely in the coming sessions. Extracts:
“If the price starts to move while staking rewards go up it could create a decent wealth effect/reflexively bullish price action. As always, barring a BTC crash.”
What do the DCR technical data say?
Decred price corrected nearly 20% shortly after hitting a daily high near $86, a level close to two key DCR resistance levels: the 200-day EMA; the blue wave) around $78 and the 23.6 Fib line near $96.
A decisive break above both price ceilings could see the DCR test the $125 level as its next upside target. However, several indicators suggest that the probability of it continuing to rise is limited. This includes a bearish divergence between DCR’s bullish prices and downward momentum (as indicated by its Relative Strength Index).
Besides, DCR price action on April 18 looked very similar to the massive bullish moves witnessed since December 2021, each showing the formation of daily candlesticks with large bullish wicks.
None of those price booms led to substantial follow-through, suggesting that market participants had simply been pumping and dumping DCR to lock in interim profits.
Consequently, The DCR is now at risk of breaking down to its immediate support target near the 50 day EMA (the red wave) near $60.
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