Decentralized Information Asset [DIA] has witnessed a significant surge in its value recently. Over the span of just 24 hours, starting from September 29th, the token recorded an impressive 68% increase in its price, while trading volume on Monday soared to sixteen times that of September 28th.
Following these substantial gains, the token encountered a resistance area when observed on the weekly charts. The momentum of Bitcoin [BTC] has also contributed to the positive sentiment surrounding DIA. The question arises: Should investors holding DIA for the long term seize the opportunity to realize profits now or wait for potentially larger gains in the future?
Rationale Behind a Sustained Upward Movement
The rapid and robust upward movement has left many traders on the sidelines, eager to participate in the ongoing rally of DIA.
This increased interest may lead to further upward momentum in DIA’s price but could also introduce volatility as late bullish activities in the futures market unfold.
After reaching $0.81, the token faced rejection, experiencing a 16% decline from its recent peak at $0.837. Despite this pullback, indicators on the daily timeframe continue to support a bullish outlook.
The CMF indicator has reached levels not seen since November 2023, and the MACD has climbed to its highest point since September 2021.
However, as lagging indicators, they are expected to trail the price action and not predict future movements.
Arguments Suggesting a Potential Local Top After the Recent Surge
Analysis of the weekly price chart implies a likely retracement towards the $0.54-$0.38 range, representing the 50% and 78.6% Fibonacci retracement levels.
Given that many traders were caught off guard by the sudden spike, a retracement followed by consolidation could pave the way for the next rally in the upcoming months.
The mean coin age has been on an upward trend since July, indicating accumulation. Moreover, the 365-day MVRV ratio reveals that 75% of holders within this period have been in a profitable position.
Such circumstances might trigger significant profit-taking activities, potentially leading to a decline in prices.
Market analysts suggest that breaching the $0.81 level might be a challenge for the bulls. With the market appearing overextended, a retracement towards key Fibonacci levels could set the stage for the next upsurge.
Disclaimer: The insights shared do not serve as financial advice, investment recommendations, or trading guidance. They solely reflect the author’s personal perspective.