It is fair to say that the global cryptocurrency market has been quite turbulent lately. With the market down more than 60% in mid-May, sellers are largely in control of Bitcoin prices, which has also had a knock-on effect on other alts.
While positive developments have led to purchases on several occasions, most notably the adoption of Bitcoin in El Salvador, sellers have responded quickly to attempts at a broader recovery in the market. The most recent development arose from speculation that Amazon Inc. could soon accept Bitcoin as legal tender.
The king’s coin reacted with a 10% rise, pushing its value above $38,000 for the first time in more than a month. Polkadot, like most of its counterparts, also saw a rise in value, trading at $14.78, up 8% in the past 24 hours. (DOT) Polkadot has started to rise.
Even before today’s jump, Polkadot has been steadily rising since the multi-month low on July 21. The latest surge above the May 23 hovered as low as $13.8 causing prices to turn bullish beyond their 20-SMA (red) after 43 days. The next target for DOT was now at a $16.4-$17 resistance zone, from where a push to $20 would be possible.
Bulls in command?
The Relative Strength Index has been rejected at 50 several times in recent months and has yet to rise above equilibrium. Awesome Oscillator formed a bullish twin peak lineup, but had yet to climb above the half mark. Directional Movement Index was also on the cusp of a bullish crossover, but the same had not yet been confirmed. All these signals suggested that it was the bulls that were making progress, although they had not yet taken full market control.
DOT’s strong correlation of 0.80 with BTC meant that the price was likely to reflect BTC’s movement in the coming week. Incidentally, BTC’s daily RSI (not shown) was close to overbought territory, which could lead to a correction before the next swing. This would have a similar outcome for DOT, which could move towards a $13.8-14 support zone. From here on, traders should be careful as a close below $13.8 could trigger an even sharper retracement. Cardano has gone up.
Since DOT bulls had yet to go through significant developments, a comprehensive rise to $20 cannot be fully supported yet. Instead, there could be a small drop before the next leg up and traders should watch for a close below $13.8 as this could trigger the next sell-off.