Decred has seen a pretty turbulent year in 2019 after the cryptocurrency managed to soar during Q1 and Q2 of 2019, increasing by a total of 156% from the February low to the June 2019 high of $38. This was a pretty solid bullish run for Decred at the start of the year!
However, after reaching the 2019 high, things started to turn sour as Decred rolled over and went on to drop by a total of 49% to reach the current trading price of around $18.67 (as of late-November 2019). Despite Decred plummeting in the second half of 2019, some Decred holders may take some salvation in knowing that their cryptocurrency is still up by a total of 15% from the 2019 opening price - something which the majority of altcoins have failed to achieve!
Nevertheless, I am still VERY bullish on Decred in 2020. The project continues to develop along its community-driven development curve as the team implement proposals that will benefit the network. In 2020, we can look forward to the introduction of a decentralized exchange as well as some great privacy features for DCR users. Furthermore, as Decred is actually a self-funding project as a proportion of the mining reward goes straight into a development fund and we can remain confident that as long as the project is alive, there will be funds that will allow for development to take the project further.
For these stated reasons, I believe that Decred has a strong potential to increase by a whopping 325% at some point in 2020 to reach my target price of $80.
In this article, I’ll firstly cover a range of topics that I believe will influence DCR in reaching my $80 target during 2020 and then analyze DCR on the long term daily charts to highlight some areas of resistance on the way toward the target.
Decred - The Definition Of Decentralized Governance
Decred has always been a project which prioritizes decentralized governance as it relies on decisions made by the community itself!
It was created by a group of developers who had forked the Bitcoin code and added their own features such as the hybrid PoW/PoS model and a very compelling decentralized governance model. They wanted to create a system that would improve upon the weaknesses that had been seen in Bitcoin and Ethereum.
Their main accomplishment is putting decision making on top of the blockchain. The aim of this was to help to prevent any hard forks that may occur down the road. We have seen many hard forks in major projects such as Bitcoin and Ethereum as the community splits to travel down different developmental curves. The Governance model for Decred helps to circumvent this as all upgrades to the network have to be voted upon by the majoirty of the network before it is able to be implemented.
To find out about Decred in more depth, take a look at this fantastic write-up!
A Governance Model That Utilizes A Hybrid Mechanism
Decred employs a hybrid consensus model in which Proof-of-Work (PoW) and Proof-of-Stake (PoS) are both utilized. The hybrid PoW/PoS model helps to eliminate the risk of mining centralization. Miners will work on the PoW chain which will allow them to secure the network and find new blocks. They will be rewarded with their efforts with up to 60% of the block reward going to them.
On the other side of the equation lies the PoS model in which anybody that owns DCR can lock their coins up in the process of staking which will grant them the right to make a vote on any community proposals for Decred.
These stakers will have to purchase tickets to allow them to take part in the PoS system. As each block only contains 20 tickets, stakers must wait to be included or purchase the tickets at a higher price. Once a block is mined with the user’s ticket inside, it is then sent to a pool in which the staker will have to wait to ‘win’. Users have a 50% chance of being selected within 28 days with a 99.5% chance to be selected within 160 days. After winning, the staker will receive his original payment for the ticket plus a staking reward.
All improvement proposals must be directed visa the Decred Assembly - a group of users who were voted in. Once an upgrade has been developed and tested, it is added to the source code and becomes active when 75% of voters say yes to the proposals.
Upcoming Releases To Get Excited For
The team is still hard at work by improving on their codebase and integrating new features to the network. Data from Santiment proves that the team has been constantly active throughout the entire year of 2019 with VERY little lulls in development.
Decred Distributed Exchange DEX -
Finally, a decentralized exchange is coming to Decred. This is perhaps the most exciting feature that will come to Decred in 2020. Stakeholders had approved the proposal in March and the team is now on the road to developing this DEX. The DEX will allow users to transfer any types of assets (including DCR itself!).
It works by enabling users to directly trade with each other using smart contracts that are published on the blockchain. This would mean that you would not have to give up custody of your cryptocurrency to 3rd party centralized exchanges, greatly reducing the risks involved with exchange hacks.
The team has estimated the cost for the work to be around $230,000 which will be drawn on a monthly basis from the treasury (development fund).
Decred Privacy Features On The Way -
Another great upgrade to look forward to is the upcoming privacy features that Decred is planning on implementing. The team has decided to go a different route to traditional privacy options (such as Ring Signatures and zk-SNARKS) and, instead, have elected to take a “mixnet approach” which is integrated into the PoS system.
Based on the CoinShuffle++ protocol, Decreds privacy features will allow the mixing process to be integrated into the ticket buying process, so stakeholders can purchase tickets anonymously.
Decred (DCR) Price Analysis
LONG TERM - WEEKLY CHART
LONG TERM - DAILY CHART
What Has Been Going On?
Taking a look at the weekly chart is a great way of seeing how Decred has been forming in 2019 at a glance. We can see that the cryptocurrency has been trapped within a range between $38 and $14 for the entire period of 2019. Although this is not a positive price movement, we can take some comfort in knowing that Decred is trading sideways rather than creating fresh lower lows!
Taking a closer look into the market on the daily chart, we can see the clear bullish run that Decred had seen during the first half of 2019. The cryptocurrency managed to travel as high as $38 during June to create the 2019 high. After reaching this resistance, Decred rolled over and started to fall.
The cryptocurrency did briefly dip beneath the 2018 support at $14.36 during October 2019, however, this was very short-lived and the cryptocurrency recovered back above this support fairly quickly!
We can see that in early November 2019, Decred started to rise higher but ran into resistance at $25.24 which is provided by a short term bearish Fibonacci Retracement level (drawn in blue).
Are We Bullish Or Bearish (as of November 2019)?
As of late-November 2019 we are currently trading within a neutral market as the cryptocurrency is neither making highs nor lower lows. For this market to be considered as bullish we would need to see DCR rising higher and making some ground above the resistance at $25.24.
For this market to be considered as bearish, we would need to see Decred falling and breaking beneath the support at the $14.36 level.
In the unfortunate case that DCR does break beneath $14.36, we can expect support to be located at $13.53, $12.14, $10.80, $10.14, and $8.79.
Where Is The Resistance On The Way Up TO $80?
Alternatively, if the bullish pressure can re-ignite and allows Decred to travel further higher, we can expect immediate resistance toward the upside to be located at $20. This resistance is provided by the 100-days EMA. Following this, resistance is expected at $23 (200-days EMA) and at the November 2019 high of $25.24.
If the bullish pressure continues to cause DCR to rise higher, resistance can then be expected at $28.14 (.618 Fib Retracement), $30, $32, $26 and $38 (2019 high).
Beyond $40, resistance is then to be expected at $44 (1.272 Fib Extension), $47 (1.414 Fib Extension) and $50. If the bulls can then proceed to bring DCR above $50, strong resistance is located at $54.39. The resistance here is provided by a long term bearish .382 Fibonacci Retracement level that is measured from the May 2018 highs to the December 2018 lows.
Higher resistance is then expected at $60 and $66.72 (long term bearish .5 Fibonacci Retracement level). IF the buyers can break above here, they will be free to make an attempt at my 2020 target of $80. The resistance here is provided by the bearish .618 Fibonacci Retracement level.
I remain super bullish on Decred for the simple fact that it is an entirely decentralized and autonomous organization. All developmental updates are voted by the community which leads to the fact that the supporters of the project should always remain happy about the direction that Decred is heading toward.
Furthermore, the project is secured in financial funding for any developmental proposals as part of the block reward is ciphered into a treasury fund for the project.
To reach my 2020 target, Decred must overcome strong resistance at $252, $30, $38, and $50. Above this, stronger resistance lies at $54, $60, $66, and $70. If the bulls can break above here, they will be free to make an attempt at my 2020 target of $80.