A Data-Driven Analysis of Dash
Dash has been one of the highlights in the first weeks of the 2020 crypto market. The privacy-focused cryptocurrency has started the new decade with a sustained bull run standing out as one of the best performing crypto assets of the year. Take into consideration, that just last quarter Dash price was feeling some selling pressure as the overall market did. On October 1st, 2019 Dash was trading at $71.27 USD per token while ending the year at $42.26 USD with a bearish sentiment and losing almost 41% of its market value in those 3 months.
The market dynamics of Dash seemed to have drastically shifted in the last few weeks. As of today (30/01), Dash is trading at $123.52 USD which represents a 180% YTD return on investment for one month. Although the positive sentiment reached its peak on January 15th towards their 90 Day High mark of $140.70 USD, marking a remarkable performance for the year. Also, it is relevant to note that currently, Dash has a market capitalization of $1,056 Billion dollars with a strong daily trading volume ranking them as number 16 of most relevant crypto-assets.
Architecturally, Dash was built on top of the Bitcoin Blockchain similar to how Litecoin, Bitcoin Cash and Bitcoin SV were originally formed. Dash was launched by developers Evan Duffield and Daniel Diaz on January 18, 2014, as a fork from the Bitcoin/Litecoin codebase, with a strong focus on speed, privacy, and near-zero transaction fees.
Dash’s main difference is the incentive model for its two-tier architecture network. The first tier is based on a standard Proof-of-work protocol, which allows Dash miners to receive 45% of the block reward. The second tier is for its special servers known as Masternodes who process transactions, facilitate coin mixing and vote on governance proposals while receiving 45% of the block reward. To become a Masternode, the user needs to make a minimum deposit of 1,000 Dash and there are almost 5,000 Masternodes available.
Unlike Bitcoin, the Dash network operates as a self-governing and self-funding model as the remaining 10% of the mining rewards go back to Dash in order to fund improvements on the technology. The network has a Max supply of 18,900,000 tokens and the current circulating supply is of 9,290,969 Dash.
Dash usage has experienced decent growth since its inception. The cryptocurrency has a highly active community of users and is consistently adding nodes to its network. This cryptocurrency aims to become a medium for daily transactions that ensure users’ privacy and anonymity. Mainly, it is viewed as a reliable payment method and store of value in emerging or distressed economies. For example, Dash has a very strong footprint in Venezuela, where they are achieving spectacular growth rates. From May to December 2019 they had a 562% increase in active wallets (not total downloads).
Dash has become highly popular mainly due to some quite interesting features. First, it includes instantly settled payments (InstantSend) which allow the users to send Dash transactions with lightning speed (within 1.5 seconds). These transactions are instantly confirmed by the Masternode Network. Additionally, Dash offers a coin mixing service called PrivateSend, where they allow users to transfer Dash privately by mixing it with other transactions. In both cases, fees are very manageable for their users. Also, recently in July 2019 Dash added ChainLocks, which was a network upgrade aiming to eliminate the threat of a 51% mining attack. This feature enables transactions to be confirmed and secured as soon as the block has been processed, rather than waiting for six other blocks to be signed first.
As a leading crypto-asset, Dash has captured the attention of traders and analysts all over the world, being among the biggest gainers on the January 2020 bull run. Dash price movements are directly related to an increased usage of its network, therefore being able to reach its current price of $123.52 USD.
Now that we have a basic understanding of the project, I want to go deeper into the analysis of its performance using a data-driven approach leveraging the IntoTheBlock platform which combines hundreds of factors to extract unique insights about the asset.
What Blockchain Data Tells Us About Dash
- Strong recovery for Dash Holders as 47% of them are In The Money right now.
IntoTheBlocks´s In-Out of the Money indicator reveals a holistic view of how this asset is doing in two different perspectives, by addresses, and by volume. As the price went from $40 USD to $117 USD this month, we can see in the graph how two big clusters became green and therefore started making money on their investment. First, there is the cluster with 227.26K addresses that bought at an average price of $73.75 USD and also the cluster right next with 128.84K addresses that bought at an average price of $93.59 USD. In both cases, these two relevant clusters of token holders were underwater back in December 2019.
Also, there is an important number of Dash holders who are currently At The Money (128.84K addresses), this group will determine if the price will continue with the positive trend.
2. Dash price volatility and its correlation to Bitcoin are going Up.
In the graph below we can see a spike in the price volatility for Dash reaching a high level of 196% on January 24th and almost maintaining it during this week. Also, it is worth mentioning how Dash is strongly correlated to Bitcoin’s movement at the moment.
3. Mining Dash is becoming more difficult over time.
IntoTheBlock’s new Hash Rate Indicator measures the speed (in computational power) at which the mining machines are validating the blocks. The graph below shows how in just one year it has almost quadrupled making the rewards more difficult to obtain for miners. In January 2019, the Hash Rate for Dash miners was 1.66k terahash per second while just recently on the 25th of January it reached its highest point at 5.69k TH/s.
4. Dash Holders are mostly western Retail Investors.
Dash is a highly distributed asset. From what we can see on the Concentration graph below, almost 85% of the holders are retail investors that own less than 0.1% of the circulating supply.
Also, with a 63.30% predominance, Dash remains more popular within users in the western hemisphere based on metrics revealed by IntoTheBlock´s East-West analysis.
5. There has been a spike in the UTXO Age Streams
IntoTheBlock´s UTXO Age Stream graph shows a distribution of the different UTXO positions over time. We can see that for this asset, 22.83% of the tokens or 2.13 million Dash have been held for a period between 2 to 3 years being the most relevant group in the composition.
6. Community and Social Interest is increasing
Dash is considered a community-driven cryptocurrency and we can see how the interest in the project is going up within social media platforms. Their users are used to being highly engaged with events and creating content about the project for others to see. Some of IntoTheBlock’s Social indicators reveal how Telegram Members and Google Search trends have been steadily going up during this month.
As Dash continues its evolution within the crypto market, some of these indicators show different views and perspectives to better understand and analyze the asset. Bear in mind that at IntoTheBlock we will keep looking for new and interesting patterns that are emerging.
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