DOT got rid of the first level – Crypto did not say its last word – L’AT du Lundi
In recent weeks, cryptocurrencies have made a very interesting technical leap. However, macroeconomics and uncertainty in the coming months still hover over the financial markets. In this new Monday AT, let’s analyze the price of DOT, the original fortune of Polkadot. Let’s see if it looks like it is under resistance or ready to take off to higher price levels.
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Bounce on a grand scale
Currently inweekly scale, the swing pattern is bearish. However, the weekly trend is bullish as the asset made a higher high and lower than the previous one. What you can see is that the DOT has rebounded from its former resistance of 2020. Until we have a breakout of a high or low, the pattern will remain bearish. So the whole price swing is an internal structure. It is best to analyze these price movements on a smaller time scale.
Theoretically, swing low should be broken to do the continuity of this weekly trend that takes place on DOWRY since November. However, this bearish breakout is not certain to take shape in the next few days. The evolution of the price may be slower. The gray line within the swing range is the boundary between the high (premium) and discount (low). That’s a relevant level to keep in mind (located at $11.96) which merges with the technical zone from the summer of 2021. So, we need to move to a daily time frame to better understand the current price structure.
DOT currently denied on his VAH
I’m currently using volume profilea indicator which allows me to approach the price differently by visualizing the areas with which there were the most exchanges. This explains the areas of contraction and expansion in price within the multi-week range. After holding above the VAL (Value Area Low) and explicitly breaking out of its POC, the DOT turned resistance to become support at 7.80/7.90 dollars (High Volume Node). It also occupies the pivot zone (blue) within the range, the DOT has just been rejected at the VAH (Value Area High).
If we do not want to attend a returned from DOT at lower price levels, the ideal would be to hold the price above its blue pivot zone at $8.60/$8.80. However, it is possible to have a bounce on HVN before moving back towards VAH (note on chart). On the contrary, the loss of the HVN that is in contact with the resistance is likely to result in the price returning to the POC before a possible wick registration at the VAL.
What about bitcoin?
To face bitcoin, we can see the formation of a new maximum. So, although the dot managed to outperform the king of cryptocurrencies in recent days, we can predict a correction of the movement in two different ways.
On the one hand, the one not shown would simply be retesting the gray area. This would indicate a strong trend that may lead to the DOT breaking its top above the VAH.
On the other hand, there could be a slightly more pronounced correction without calling into question the bullish momentum. This would be a return to the POC before the rebound (scenario shown on the chart). However, thethe whole market is under resistance and it seems that DOT does not escape the rule, especially since it is a cryptocurrency where we can see a strong lack of dynamism.
Here we are at the end of this technical analysis of DOT, an asset that is still in a range. Since they have benefited little from the rally, is this an advantage that should be set aside or is it a latecomer that will emerge in late August. For now, DOT must maintain certain key levels it has released if it wants to return to higher levels. At the same time, he must avoid breaking the uptrend in relation to bitcoin if he does not want to enter the failure stage.
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