Polkadot has been in a solid uptrend since bottoming out in July, but may be due for a technical pullback. If so, is this a buying opportunity in one of the top projects in the crypto space?
Uptrend Pullback Ahead on Polkadot?
What’s up all my crypto fiends!? Today we’re checking out the Polkadot network and the price action in the Polkadot token (DOT) against the U.S. Dollar. The Polkadot protocol is one of the largest projects in the crypto space, and it focuses on cross-chain data transfers. It was founded by Gavin Wood, who also co-founded the Ethereum network before breaking away and doing his own thang with projects like Polkadot, the Web3 Foundation and the Kusama network.
The Polkadot token is the core asset in the protocol, used for governance, operations and creating parachains. DOT is in the top ten of all crypto assets in terms of market cap ($37B) and trading volume ($3.49B), and it’s safe to say that with large investors into the token and a rapidly expanding ecosystem of projects, the long-term probability for DOT to continue to rise in value is pretty strong.
In the short-term, though, those bullish on DOT/USD may wanna stay alert as we see bearish divergence on the four hour chart above between price (higher ‘highs’) and stochastic (lower ‘highs’). And a pullback may be due as DOT/USD just made a quick run higher after the crypto space was pulled down by the flash crash in bitcoin last week. After bottoming out around $22, DOT/USD bounced back bigly to break the previous swing high at $35.65 to hit $38.74 in yesterday’s session.
That’s a massive 77% rally in just one week, so it makes sense that there could be a pullback in the cards on profit taking. And if that scenario plays out, longer-term bulls may be watching the previous area of strong interest and the rising ‘lows’ pattern (around $27.50 – $30.00) as a potential buying area.
We’ll be watching that area for bullish reversal patterns for a potential long position, if the fundamental story remains bullish. But what do you guys think? Is DOT a buy longer-term against the Greenback? Will the pair pull back all the way to the $30 handle before resuming the uptrend, or is a deeper pullback ahead beyond last week’s lows?
Let me know in the comments below, and as always, remember to never risk more than 1% of a trading account on any single trade. Adjust position sizes accordingly. Create your own ideas and don’t simply follow what I do.