There are two perspectives on how the price of DAI is determined.
Fundamental Value: This approach looks at on-chain metrics, project performance, and financial indicators of DAI. Over the long term, factors like supply and demand, tokenomics, use cases, project roadmap, and relevant regulations or governance can all affect DAI's value.
Price Action: This perspective primarily involves using technical analysis tools like chart patterns, MACD, RSI, and Bollinger Bands to forecast price movements of DAI based on past trends, based on the principle that 'history tends to repeat itself.' Price action of DAI is also affected by news, announcements, and the general sentiment of the community.
While long-term investors focus on the fundamentals, short-term traders typically rely on technical indicators. Both can influence the price of DAI.
