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Polkadot Price Analysis: DOT/USD bulls should exert sufficient strength to break the $33 barrier

TL;DR Breakdown

  • The price of Polkadot shows signs of a bull trap.
  • The high and low points of the Cloud are not confirmed by Polkadot’s oscillators.
  • It’s good to be prepared, but don’t expect an immediate recovery.

Polkadot Price Analysis: General price overview

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.

Polkadot Price Analysis in the last 24-hours: A DOT/USD hidden bearish divergence signal indicates that sellers may be gaining power

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.

Polkadot price movement in the last 4-hours

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.

Polkadot Price Analysis: Conclusion

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.

Disclaimer. The information provided is not trading advice. Cryptopolitan.com holds no liability for any investments made based on the information provided on this page. We strongly recommend independent research and/or consultation with a qualified professional before making any investment decisions.

This post was last modified on October 5, 2021 4:56 am

Richard Adrian

Richard is a versatile fintech analyst with a deep understanding of blockchain domains. As much as technology fascinates him, he finds the intersection of both technology and finance mind-blowing. The firm belief that fintech will drive the future has brought him to the crossroads of Fintech discoveries and transmission of immutable data to a wider audience - Cryptopolitan.

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