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What does Polkadot’s descending triangle mean for its price

Polkadot’s correlation coefficient with Bitcoin has steadily increased in the first half of 2021. During this period, DOT registered all-time highs during the month of February, April and May. However

The post What does Polkadot’s descending triangle mean for its price appeared first on AMBCrypto.

Polkadot’s correlation coefficient with Bitcoin has steadily increased in the first half of 2021. During this period, DOT registered all-time highs during the month of February, April and May. However, its strong relationship with BTC was both a boon and bane. The king coin’s steady decline from $40,000 had a negative effect on DOT’s price as it retraced from $26 to $19 in the last seven days.

At the time of writing, Polkadot traded at $19.5, down by 7.7% over the last 24 hours and with a market cap of $18.6 Billion.

Polkadot Daily Chart 

What does Polkadot's descending triangle mean for its price

Source: DOT/USD, TradingView

Since the 19th May crypto sell-off, Polakdot has formed three lower highs- at $31, $28, and $26. Since losses were maintained above a defensive region of $19, a descending triangle appeared in the process. This also meant that DOT could see more losses over the coming days in case of a breakdown from the pattern. This would likely see the digital asset move back within its demand zone of $14-16.

Reasoning 

DOT’s market was increasingly bearish at the time of writing. Prices slipped below their 20-SMA (red) on 17 June. Relative Strength Index was denied a break above 50 and moved south at the time of writing. A fall back into oversold territory would translate to weaker price action before a bounce back. On Balance Volume’s downtrend suggested that selling pressure was still dominant in the market. Moreover, MACD line was close to a bearish crossover with the Signal line.

Considering the above factors, DOT was expected to dip further over the coming days. The price could reset within its demand zone of $14-16 before its next upcycle. Traders could capitalize on this movement by setting up short trades. Visible Range showed that the point of control rested around $16.8, and an additional retracement below this zone was unlikely.

Conclusion

The formation of a descending triangle threatened further losses in the coming days for DOT. Bearish signals were present all across the board as sellers remained dominant in the market. A breakdown from DOT’s pattern could see it move back towards a demand zone of $14-16.


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Source: https://ambcrypto.com/what-does-polkadots-descending-triangle-mean-for-its-price

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