Polkadot 2-Week Chart Hints At Price Breakout With Bulls Taking Control
After setting a new all-time high of $54 in October of 2021, Polkadot’s valuation has been in a free fall, currently trading at a shade over $18. Despite shaving off two thirds of its valuation, multiple market indicators are flashing that a bottom for DOT may be in sight.
By Andrew Senior
March 14th, 2022
DOT’s 2-week chart encompasses the potential to be an excellent market indicator to highlight upcoming buying opportunities. The 2-week Relative Strength Index is currently hovering around the 44 level, a meager four integers away from the infamous 40 level. For Polkadot’s price to fall into the 40-zone, bears would have to show renewed effort to drag DOT down by 12% from current price towards $15. Polkadot’s price has also been showing underlying evidence of smart-money involvement, especially on the higher timeframes where whales tend to swim.
Moreover, the relative strength index (RSI) is displaying bullish divergence. The lows reached on July 21, 2021, at $10.37, are higher on the RSI than the lows from the last four weeks at $16.5, displaying favorable market conditions.
If bears do manage to take control of DOT’s valuation and are successful in creating a 2-week close below $15, any positive price movements would be off the table with further losses to be expected.
The Bollinger Bands, useful in identifying an asset’s moving average and determining if the price point is low or high, can be another clear indicator of smart-money involvement on the 2-week chart. Due to Polkadot‘s negative price movement, the lower band dropped to the downside over the past few trading sections which usually indicates a bullish price action.
The true challenge for investors trying to find a bottom will be timing. Any sell-off will likely be pounced on by DOT enthusiasts, yet if bears are successful in pulling Polkadot to $15 or below on the 2-week chart, a renewed bear market is likely as the RSI would drop out of buying territory bringing the possibility of lows between the $10.37 and $12 range. True believers may be best suited by dollar cost averaging their way into this up and down market.
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