Polkadot Displayed Bearish Engulfing Candlestick; Suggests Further Downtrend
May 14 2022 - 9:00PM
NEWSBTC
Polkadot has been on a sharp decline over the last week as the
broader market extended losses at press time. Bitcoin nosedived to
$28,000 and presented a loss of 7% over the last 24 hours. All
major altcoins have followed the same path registering losses on
the daily chart. Polkadot was trading in a descending trendline,
although, DOT tried to recover on charts. The recovery can be
stalled if buyers don’t return to the market. The price of the
altcoin was trading close to its immediate support of $8.04. DOT
was last seen trading around this price last in July 2021. In the
last four months, Polkadot displayed rangebound rallies. The price
of DOT was sandwiched between $24 and $16 over the last 17 weeks.
Although Polkadot staged a revival, it is too early to conclude if
the coin will continue to move northbound. Polkadot Price Analysis:
One Day Chart Polkadot was trading at $10.64 at the time of
writing. In the last 24 hours, DOT lost over 12% and in the past
week, the coin lost close to 30% of its market value. Descending
trendline depicts bearishness, even though the coin was attempting
to rise above the immediate resistance line of $10.80. Moving above
the $10.80 price level, the coin could target $13.22. To invalidate
the bearish thesis the coin has to trade above the $14 price level.
The coin displayed a series of bearish engulfing candlesticks
(green arrow) on the one day chart. The bearish engulfing
candlesticks mark the onset of bearish price action and the
continuation of the same. In case of a price reversal, if the coin
manages to stay above the $13.22 price level, then the other two
resistance for DOT stands at $16.06 and $17.46, respectively. The
trading volume of the coin was seen in the green. This meant that
the coin was displaying a change in price direction. Technical
Analysis Polkadot was oversold over the past few days, however, the
coin started to register an increase in buying strength. The
Relative Strength Index noted an uptick on the one day chart. The
RSI moved above the oversold zone as buyers started to enter the
market. Buying pressure remained low in the market as the coin’s
price was still driven by sellers in the market, despite the
uptick. The Directional Movement Index depicts the price momentum
in the market. DMI was negative on the chart as the -DI was above
the +DI line which signified bearish price action. Related Reading
| XRP Flashed A Sign Of Revival; Where’s It Headed Next? Polkadot
was trying to recover on its chart because the indicators have
reflected that price action. Chaikin Money Flow portrays the
capital outflows and inflows. On the one day chart, Chaikin Money
Flow was seen registering an uptick that points towards increase in
capital inflows over outflows. Awesome Oscillator signifies price
momentum of the market. The AO continued to flash red histograms
underneath the half line which meant that Polkadot was still on a
negative price direction. Related Reading | Bitcoin Recovers Above
$30,000, Has The Bottom Been Marked?
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