The price of Polkadot is approaching a turning point. After rising strongly, like the majority of the cryptocurrency market, Polkadot has halted. At first sight, Polkadot appears to be in fantastic buying conditions. However, not everything is as it appears.
The price of Polkadot is sending contradictory messages, which is causing no end of aggravation for buyers and sellers. While PolkaDOT has broken through the Cloud and even surpassed the Tenkan-Sen and Kijun-Sen, the Chikou Span remains in a tight grip and is neither bullish nor bearish. The oscillators indicate indecision and volatility.
At the moment, the Relative Strength Index is in a bear market. It’s difficult for it to pass over the first overbought condition at 55, which is where the Relative Strength Index is sloping downward and away from.
The Composite Index also exhibits noticeable hidden bearish divergence, with lower highs produced by Polkadot price on the candlestick chart and higher highs on the Composite Index. Finally, the Optex Bands have developed strong hook south.
24-hour DOT/USD chart by TradingView
To invalidate a bearish continuation, one condition must be met. The Chikou Span must close at a price level that will not intercept any candlesticks for the next five to ten periods. This can only happen if Polkadot prices close above $37.50. If this does not occur, it is likely that the price will return to the Cloud with a downward bias.
Although there are bulls near term, there are no signs of momentum. Despite the breakout above the Kumo, the price has begun to fall below another Tenkan-Sen line. This is typically regarded as a sign of selling pressure and will continue if the Chikou Span falls below 0.00001169, as it is now. Momentum indicators are also falling and MACD shows a bearish signal near term.
The price of Polkadot continues to show signs of a hidden bearish divergence with oscillators slipping into the bear market territory. This suggests that buyers may be losing power and sellers are taking over. Sellers have been able to push the price below the Cloud, although it remains above a Kijun-Sen line. The Kijun-Sen is indicating a downward trend with a potential cross into a bear market developing.
Option traders should watch for an exit from the Cloud as this has proven to be a significant turning point. Once the price exits the Cloud, an exit of $37 is likely and will signal a change in momentum.
Finally, the DOT price is set to reverse course and move back towards the pivot at $28. Any further drop below $26 would be devastating, having just passed through resistance at $33. The declining RSI values, as well as increasing trading volume, are tell-tale indicators that traders are beginning to sell the cryptocurrency. The depth of $ the decline will be determined by how long the price remains below $33.
With no sign of immediate recovery, buyers should cautiously watch for support near $26 and may at least consider purchasing DOT close to that price range. The pivot at $28 will offer buying opportunities if the market enters another period of accumulation. Buyers should be aware that initiating long positions after an extended decline in prices is very risky.
This post was last modified on October 5, 2021 4:56 am
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