After surging 114% in less than a week, Decred (DCR) sharply reversed on Wednesday, falling nearly 30% intraday to trade around $36. The broader interest in privacy-focused cryptocurrencies also have appeared to cool. Zcash (ZEC) and Dash (DASH) – which had rallied in parallel – also saw notable declines.
Despite the retracement, Decred is still trading well above key trend indicators. The coin remains above its volume-weighted average price (VWAP) of $24.52, and continues to hold comfortably above its 9-day and 26-day exponential moving averages, now sitting at $25.24 and $20.39, respectively. This preserves the broader short-term uptrend, even as momentum slows.
Indicators Still Point to Overheated Conditions
The 14-day Relative Strength Index (RSI) is still high at 89, while the 7-day RSI sits at 96 – levels rarely sustained in trending markets. These conditions often appear with short-term peaks, especially when paired with rapid price expansion.
Price also remains outside the upper Bollinger Band, with the top band currently at $31.37. This signals that price volatility remains stretched, and that recent gains may have outpaced typical trading ranges. The retreat toward more neutral territory could reflect natural profit-taking rather than a fundamental shift in sentiment.
Key support now sits at the 61.8% Fibonacci retracement level near $34.42. If that area holds, it could mark the low of a temporary correction. A sustained move back above $41.22 – the 50% retracement level – would suggest that bulls are regaining control and treating the pullback as a consolidation phase within the broader trend.
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Outlook Remains Volatile
While the short-term correction confirms earlier signals of overextension, Decred’s overall technical structure remains constructive above key trend levels. For now, the indicators suggest heightened volatility with short-term downside pressure. But unless key support zones break, the broader uptrend may still be intact.
The wider drop in other privacy coins such as ZEC and DASH highlights that the recent rally was likely driven more by sector rotation, profit taking and narrative trading than isolated fundamentals. With speculative interest now cooling, price action over the next few sessions will be key in determining whether the move was a short-lived spike – or part of a longer trend.
