Disclaimer: The results of the following article are the sole opinion of the author and should not be construed as investment advice
Historically, the price of polkadot has seen a crash due to its correlation with the larger altcoin market. At the time of writing, the situation seemed optimistic for DOT, a project that is one of Ethereum’s main competitors, particularly in the DeFi space. While ETH has problems with scalability, newer competitors like DOT have the lead it needs to overtake ETH.
However, since ETH has the first mover advantage, this has prevented its collapse on the charts.
Polkadot 4 hour chart
The table attached above underscored the predictions made in an article dated November 19. Since then, Polkadot has not only met its goals, but exceeded them, making a profit of ~ 30%.
The price of the cryptocurrency shot through the golden pocket and hit the target. However, a lot has happened since these highs were reached. The price tracked almost all of its gains and before it rose again. This can be seen in the graph attached below, which also highlighted the formation of a bullish pattern.
As mentioned earlier, the bullish pattern was the descending channel, a pattern that appeared to be close to the breaking point. The gold pocket, which ranges from $ 4.69 to $ 4.80, is the stepping stone that caused the outbreak.
However, there are scenarios that can prevent this from happening. These include,
- Bitcoin crashes, pulls alts down with it.
- The golden bag is failing due to selling pressure, creating a similar scenario seen at the beginning of the channel
Hence, it is recommended that you take extra precautions before entering any trade at the golden pocket. The RSI indicator indicated that it was headed towards the overbought zone. However, there appeared to be enough room for the price to push towards the top of the channel.
Should the pocket fail, the support at $ 4.449 will act as a line of defense.
At the time of writing, DOT was testing support at $ 4.918. It is expected to break the bullish pattern and move higher. However, this is not an asymmetrical bet as the disadvantage also appears possible. The golden pocket decides whether a long position is possible or not.
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