Polkadot had a rally after all the cryptocurrencies started their mark up. Right now, Polkadot is at the ressitance price of 8.21. This level has previously been held 4 times and has the tendency to push the market down. On the higher time frames, the structure is still bearish but on the 4H, we need to break this resistance in order to turn bullish. This level is the make or break for the Dot bullish or bearish sentiment. After shorting the Dot, we anticipate the mark down towards the support level standing at 6.21.

The ascending trendline has been broken out for sells and has been validated. If we take the normal standard pattern of a breakout sell, we always wait for a retracement before taking the actual sell after the breakout. Therefore, right now, the market is retracing at the resistance level after the breakout and conforms to our rule of breakout sell and retracement.

The golden retracement area of 75-78.6% has been logically in confluence with the resistance level. This level being in confluence will have an added impact on the short position we will be taking on Dot.

EMA 50 is giving us a bullish sentiment, as earlier, the market had broken out for buys from this EMA 50. This EMA 50 needs to be retested after being broken out and the retest is still pending. We can short till the retest of this EMA 50.

On RSI, we see a bearish divergence forming. This bearish divergence is being formed on the over bought region of the RSI. With that, we analyze the market further bottoming down towards the support level.

In its entirety, we see three technical factors favoring bearish where as only the EMA 50 is pointing towards the bullish sentiment. Therefore, we will look for the bearish setup as thats where we see more potential with the technical factor.

Mixed signals on Polkadot

Jul 30 2022