Sheldon McIntyre, CMT
FXStreet
- Polkadot price withstands broad-based selling to hold critical price level.
- Daily Relative Strength Index (RSI) does confirm oversold condition.
- Relite Finance and Polkadot making breakthroughs in scalability.
With the fireworks of the bounce now over, it is time to scrutinize the legitimacy for a continuation of the rebound. The short answer is that the technicals are stacked against a leap higher from the current price.
Polkadot price volume not flashing emotion or commitment
No topic has greater traction in the blockchain world than decentralized finance (DeFi). It is revolutionizing the financial sector by offering services to everyone with a smartphone and an internet connection. It eliminates discrimination and high fees and replaces them with user-friendly and open source solutions.
Blockchain technology demands that every transaction is registered publicly on the blockchain. Still, this process limits the number of transactions that can be executed simultaneously and results in scalability problems.
A cross-chain lending project, Relite Finance, built on the Polkadot blockchain, has partially solved the problem. The key is that Polkadot is separate from Ethereum, but it has interoperability built-in facilitating cross-chain transfers of data or assets, thereby resolving the scalability issue.
DOT is confronted by reinforced resistance due to the double-top trigger price combined with the 50-day simple moving average (SMA) at $37.05. A successful breach of the resistance would propel the alt-coin to an all-time high of $49.20. Any further upside targets need to be projected after considering the price and volume action framing the rally.
DOT/USD daily chart
On the downside, selling pressure will meet support at the 100-day SMA at $31.55, followed closely by the 50% retracement of the 2021 advance at $26.86. Any more selling will enter a price vacuum, leaving the potential downside undefinable at this point.
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