How Polkadot’s traders can cash in on a projected retracement

Polkadot Coin
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice

Polkadot’s recovery has been in line with most altcoins in the market that rallied on the back of Bitcoin’s most recent rebound from $30,000. Its push from 20 July’s low of $10.3 to its press time level of $16.4 highlighted staggering gains of nearly 60% in 11 days. However, a closer look at its daily chart seemed to suggest that the cryptocurrency is set for a retracement.

At the time of writing, DOT was trading at $16.45, up by 11.2% over the last 24 hours.

Polkadot Daily Chart

Source: DOT/USD, TradingView

Polkadot’s chart highlighted several breakdowns since late-May. Its first decline was triggered when the price moved south from a symmetrical triangle, one which resulted in a 34% sell-off. The second came on the back of a horizontal channel breakdown – A move that resulted in another 30% retracement.

Its bounceback from 20 July’s swing low of $10.3 resulted in an uptrend which was a breath of fresh air in the market. However, at press time, bulls were under the threat of another correction as the price approached $17. This area clashed with the Visible Range’s POC. It also coincided with an upper sloping trendline that emerged post-DOT’s 19 May plummet.

Hence, there seemed to be a great chance that traders would sell DOT at this level to capitalize on their long positions.

Indicators v. Resistance? 

At the time of writing, DOT’s indicators were lining up a bullish narrative against a strong resistance level. The Relative Strength Index rose above 50-55 for the first time in over 2 months, whereas both the Awesome Oscillator and MACD noted a hike in buying pressure.

While these were certainly positive signs, DOT needs to close above $17 to invalidate a bearish outcome. Failing to do so could result in a correction back towards 23 May’s swing low of $13.8 and the 20-SMA (red).

Conclusion 

DOT flashed positive signals as it approached the crucial price ceiling of $17. Unable to maintain its rise above this level over the next 24 hours might enable the next market sell-off. Traders can cash in on this move by shorting DOT at $17 and exiting their positions at $13.8. This would result in gains of 18%.

Ronnie Huss

Ronnie Huss

Leave a Reply

Your email address will not be published. Required fields are marked *

Share:

Share on telegram
Share on facebook
Share on twitter
Share on linkedin
Share on whatsapp

Related Posts

bitcoin
Bitcoin (BTC) $ 51,701.85
ethereum
Ethereum (ETH) $ 3,121.23
tether
Tether (USDT) $ 1.00
bnb
BNB (BNB) $ 388.55
solana
Solana (SOL) $ 103.60
staked-ether
Lido Staked Ether (STETH) $ 3,116.54
xrp
XRP (XRP) $ 0.541772
usd-coin
USDC (USDC) $ 0.999711
cardano
Cardano (ADA) $ 0.590362
avalanche-2
Avalanche (AVAX) $ 37.45
dogecoin
Dogecoin (DOGE) $ 0.086010
tron
TRON (TRX) $ 0.137546
chainlink
Chainlink (LINK) $ 18.77
polkadot
Polkadot (DOT) $ 7.87
matic-network
Polygon (MATIC) $ 0.994356
uniswap
Uniswap (UNI) $ 10.90
wrapped-bitcoin
Wrapped Bitcoin (WBTC) $ 51,824.89
the-open-network
Toncoin (TON) $ 2.09
internet-computer
Internet Computer (ICP) $ 12.56
shiba-inu
Shiba Inu (SHIB) $ 0.000010
bitcoin-cash
Bitcoin Cash (BCH) $ 267.44
litecoin
Litecoin (LTC) $ 70.21
dai
Dai (DAI) $ 1.00
immutable-x
Immutable (IMX) $ 3.24
filecoin
Filecoin (FIL) $ 8.28
cosmos
Cosmos Hub (ATOM) $ 10.39
leo-token
LEO Token (LEO) $ 4.23
ethereum-classic
Ethereum Classic (ETC) $ 27.38
kaspa
Kaspa (KAS) $ 0.170416
near
NEAR Protocol (NEAR) $ 3.70
blockstack
Stacks (STX) $ 2.57
optimism
Optimism (OP) $ 3.86
hedera-hashgraph
Hedera (HBAR) $ 0.108367
bittensor
Bittensor (TAO) $ 565.65
aptos
Aptos (APT) $ 9.64
vechain
VeChain (VET) $ 0.046057
stellar
Stellar (XLM) $ 0.116146
first-digital-usd
First Digital USD (FDUSD) $ 1.00
injective-protocol
Injective (INJ) $ 35.80
lido-dao
Lido DAO (LDO) $ 3.40
okb
OKB (OKB) $ 50.29
mantle
Mantle (MNT) $ 0.903380
the-graph
The Graph (GRT) $ 0.311256
celestia
Celestia (TIA) $ 16.90
render-token
Render (RNDR) $ 7.24
crypto-com-chain
Cronos (CRO) $ 0.094472
arbitrum
Arbitrum (ARB) $ 1.91
monero
Monero (XMR) $ 129.59
sei-network
Sei (SEI) $ 0.814794
rocket-pool-eth
Rocket Pool ETH (RETH) $ 3,431.96