- Polkadot price is undergoing a retracement after it failed to hold above a supply zone ranging from $19.14 to $20.61.
- The co-founder mentions that they have recently deployed six parachains, and their effects will be apparent in the near future.
- A resurgence of buyers that flip the said supply zone into a demand area will invalidate the bearish thesis.
Polkadot price has rallied exponentially from July 20 to August 8, but things took a turn as the cryptocurrency market began to reverse. In addition to the overall selling pressure, a technical indicator flashed a sell signal, further exacerbating the descent.
Early days in the Polkadot land
Referring to the 2020 DeFi Summer and multiple blockchains like Aave, Sushi and others that took off, Polkadot co-founder Rob Habermeier explained during an interview with The Scoop that Polkadot is still in the early stages.
He explains that Polkadot recently launched the first version of parachains on the Kusama Network. Unlike many blockchains, Polkadot establishes application-specific data structures, known as parachains, that can focus on a specific industry sector.
Touching more on the topic, Habermeier added,
There are six parachains deployed on the Kusama network. Those are focusing on DeFi, smart contracts, Layer 2 scaling, identity secure compute [,which] are some of the first projects we are starting to see emerge on Polkadot.
Since the “parachain season is just beginning," the co-founder expects these projects to have their community and grow as time progresses and even have applications built on top of them.
Polkadot price needs to find stable ground
Polkadot price rallied roughly 110% between July 20 and August 8. After piercing the supply zone ranging from $19.14 to $20.61, and setting up a swing high at $21.72, DOT has dropped 13%.
This descent has pushed Polkadot price below the said area of resistance, which is a bearish sign. While the downswing was evident after such a massive uptrend, investors can expect it to extend lower, especially since the Momentum Reversal Indicator (MRI) has flashed a sell signal in the form of a red ‘one’ candlestick on the 12-hour chart. This setup often forecasts a one-to-four candlestick correction.
The immediate support level at $18.34 is the first level sellers will encounter. Breaching $18.34 will push DOT down to $17.01, roughly 12% from the current position, $19.34.
Although it is unsure if the sell-off will continue after $17.01 if the recent upswing was a shift in the narrative to bullish, investors can expect an upswing to originate here.
DOT/USDT 12-hour chart
Regardless of the bearish pressure, if the buyers make a comeback pushing Polkadot price above the supply zone’s upper limit at $19.14, it will indicate that an upswing is likely to survive.
A confirmation of the bullish outlook will arrive after DOT price produces a bounce off the $19.14 barrier. If this were to occur, market participants could expect a 15% ascent to $23.64.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Follow us on Telegram
Stay updated of all the news
Binance CEO calls CFTC suit “disappointing” as district court halts Voyager $1 billion sale to Binance.US
Voyager’s deal with Binance’s United States entity, Binance.US, faced another hurdle on March 27, the same day that the Commodity Futures Trading Commission (CFTC) went after the crypto exchange. This is the second time in the span of a month that Voyager’s deal has been objected against by the government.
90% of Ethereum supply leaves exchanges as regulators struggle to classify ETH as Security or Commodity
Ethereum is known not only as the second-biggest cryptocurrency but also as the second-generation cryptocurrency. The blockchain not only brought Decentralized Finance (DeFi) to the crypto space but also framed a target on its back following its Proof of Stake transition plan.
This is how EOS holders responded to the network's EVM testnet launch, what to expect this week
The first milestone on the EOS Network Foundation’s roadmap, the completion of the EOS EVM (Ethereum Virtual Machine) code, was achieved on March 22, starting the countdown to the launch of the EOS testnet. Well, it is finally here and the community is elated as it brings them closer to the mainnet release on April 14.
XRP price recovers above $0.44 as court ruling approaches, will Ripple win against the SEC?
XRP price has kept its momentum, flashing green on the one-day timeframe as the countdown to the Ripple vs SEC lawsuit continues. The remittance token is moving in tandem with our prediction last week, soaring by a significant margin to secure a place among the best-performing cryptocurrencies on a one-week timeframe.
Bitcoin: Should you trust this BTC sell signal or wait for $34,000?
Bitcoin price shows a clear picture of its rally after it breached a long-term bullish pattern in mid-January. As the rally takes a breather, sell signs have started to emerge, which is putting investors in a confused state.