The surge was caused by the launch of the GETCA$H swap program on October 5. The program was announced on the dukascoin.com website where it was explained that the purpose of it is to improve liquidity. Namely, the program was launched because the price had been almost dead flat since early September.
Quoting the website: "To improve the liquidity of DUK+ stakes collected by clients, the Bank launches GETCA$H swap program. This program allows holders of DUK+ stakes to get fast access to fiat money by means of the swap – a special exchange contract of Dukascoin for EUR with further buyback at a fixed price. The standard contract duration is one month.
Clients may apply for prolongation of the initial swap by paying a fee. The cost of use of the received cash is based on a 7.5% annual rate. The swapped stake continues to be active but its duration is correspondingly prolonged for the term of the swap. For more details, please visit the web page dedicated to this program."
The second surge of the pair began on October 15, when the price jumped more than 16.50%. Eventually the surge encountered resistance, as it reached the 2.5100 level. Since October 17, the rate stood at the 2.5100 level, as at that level it faced the sell orders for more than 1,500.00 coins.
There is a reason why the rate faces a possibly new wall of sell orders at the 2.5100 level. The reason is the low liquidity fee application level, which has been set at 2.5000 EUR per DUK+. This level was set on July 20.
Note that up to the exact middle of summer the rate traded flat at the level of the application level of the low liquidity fee. Namely, from late February up to July 15 the rate mostly stood at the 3.5100 level due to the fee application level being set at 3.5000. On July 15, the level was set at 3.0000 and on July 20 at 2.5000. The change of fees caused a sell off of DUK+, which took the form a channel down.
Information about the changes can be found in the dukascoin fees and limits page.
Daily Candle Chart
Market Depth
Market Depth reveals, where traders have set up buy and sell orders. The up to date data is published at dukascoin.com. Below, one can observe the market orders on October 20.
In regards to sell orders, a minor wall of sell orders is located at 2.5100, as 1,618.70 coins are up for sale at this level.
Above the sell order wall, there are orders to sell 400.00 coins at 2.7000. In the meantime, there are orders for almost 1,500.00 coins to be sold in the 2.9800/3.0100 range. Above 3.0100, there are orders to sell 100 coins at each price level.
On the other hand, the most close by buy orders were located 50 cents below the current price. At the 2.2100 level, there are orders to buy 100 coins. Below the 2.2100 price level, there are almost no bids.
© Dukascopy Bank SA
© Dukascopy Bank SA
Future outlook
A surge of the pair is highly unlikely due to the wall of sell orders at 2.5100, where the coins owners intend to sell without the added fee.
Meanwhile, a decline is also unexpected, as there are no buy orders as low as 2.2100. In addition, there are orders for a small quantity of coins.
Due to the stalemate, it can be expected that the DUK+/EUR rate would remain flat.