The frenzy for Privacy Coins is back! Dash surged 49% in a single day, breaking through its 2023 high, and a short-term pullback may present a buying opportunity.

The Dash (DASH) token experienced an astonishing rise of nearly 49.7% in the past 24 hours, breaking through the resistance level of $77.9 set at the beginning of 2023. This surge is part of the privacy coin frenzy sweeping the market, following ZCash (ZEC) breaking through multi-year highs. Dash's volume is strong, and bullish sentiment is firm, although there may be overbought conditions in the short term, the heat of the privacy narrative is unlikely to fade quickly. Traders should follow whether the price will pull back to the support area of $70 to $78 to look for potential buying opportunities.

Privacy Coin Narrative Explodes: Dash Breaks Through Years of Key Resistance

Against the backdrop of increasing demand for privacy protection in the crypto market, Privacy Coins like Dash and ZCash are experiencing a strong wave of rise.

• Dash impressive rise: The price of Dash surged 49.7% within 24 hours, successfully breaking through the resistance level of $77.9 set in January 2023.
• Sector linkage effect: This rise is closely related to the price surge of another Privacy Coin, ZCash (ZEC), which reached $449.8, a level not seen since 2018. This linkage indicates that the privacy narrative is capturing market attention and demand.
• Strong bullish sentiment: Given that the prices of ZEC and DASH are at multi-year highs, along with the strong volume over the past five weeks, the market's bullish sentiment on the privacy narrative is firm and unlikely to fade quickly in the short term.

Technical Analysis: Buying Opportunities and Risks After Breaking $77.9

From a technical chart perspective, Dash's breakout is a clear signal of bullish strength, but short-term indicators suggest overbought risks.

• Weekly breakout confirmation: The weekly chart shows that the price of Dash has broken through the January 2023 high of $77.9. If the weekly closing price can stay above this level, it will be a strong signal of bullish momentum.
• Demand and resistance: OBV (On-Balance Volume) hit a new high, reflecting significant buying pressure. The next major resistance level above is the swing high of $138.8.

(Source: TradingView)

• Overbought warning: The RSI (Relative Strength Index) on the 4-hour chart shows extreme overbought conditions.
• Potential buy zone: Given the short-term Overbought condition, traders should not chase the price higher at this moment, but should wait for a price pullback to the key demand zone, such as between 70 and 78.

Derivatives Market: Shorts Suffer Severe Liquidation, Hedging Risks Are Enormous

The data from the derivatives market further confirms the strong demand in the spot market and reveals the significant risks of shorting against the trend.

• Long and short liquidation comparison: CoinGlass data shows that in the past 24 hours, short positions worth 3.38 million USD were liquidated, far exceeding the 1.6 million USD of long liquidations.
• Increased Demand: The rise in Open Interest and spot CVD indicates that demand in both the spot and derivatives markets is increasing.
• Short selling risk: Although the long-short account ratio has decreased (indicating that traders are trying to short at the top), the surge in short liquidations proves the significant risks of counter-trend trading.
• Trading advice: For traders, now is not the time to chase highs or short; one should wait for a pullback. For long-term investors, one should continue to hold (HODL).

Conclusion

The nearly 50% surge of Dash in 24 hours is strong evidence of the robust return of the Privacy Coin narrative, and breaking through the key resistance level of $77.9 indicates that the long-term bullish structure has been confirmed. However, the short-term overbought indicators and the painful lessons from short liquidations remind investors to stay calm. Patience in waiting for the price pullback to the support area of $70 to $78 may provide a safer entry point for those optimistic about the Privacy Coin sector.

Disclaimer: This article is for news information only and does not constitute any investment advice. The cryptocurrency market is highly volatile, and investors should make cautious decisions.