Aaryamann Shrivastava
FXStreet
- Polkadot, although not making any recovery currently, is on the path to note a rally by November 10.
- Short-term traders can capitalize on Polkadot’s high volatility, which is resulting in vast fluctuations.
- Newer investors should refrain from entering the Polkadot market as the potential risk-adjusted returns for DOT are negative at the moment.
Polkadot is among the cohort of cryptocurrencies that have yet to witness any recovery since the recent spikes in prices were wiped out by the dips in August. Standing at its June lows, DOT needs support from its investors as well as the broader market cues since, by itself, it is unable to sustain a rally.
Polkadot is struggling to mark a rise
The 24-hour chart highlights that Polkadot is still in the danger zone, forming lower lows despite the dip of August taking place two weeks ago. Trading at $7.37, the next best bet for DOT to engage in a rally is somewhere around November 10.
The timeline has been deduced by the repeated pattern of the Relative Strength Index (RSI), where DOT took 67 days to rise from the oversold zone to the overbought (OB) zone for the first time this year and another 88 days during May to August period.
Polkadot 24-hour chart
Considering that average, the next time RSI reaches the OB zone would be after almost 74 days. In the same period, DOT needs to reclaim the support of the 38.2% Fibonacci retracement level in order to engage in recovery to its local top of $23.21. Once that happens, DOT will have a chance to rally on and complete its 214% recovery.
While this rise demands patience from investors, DOT has much more to offer its short-term traders. The volatility on Polkadot is extremely high, which is visible by the fluctuations.
Polkadot 4-hour chart
The widening Bollinger Bands is an indication of the same. This leaves enough room for scalpers and short-term traders as the closest lower high is just 30% away.
However, first-time Polkadot investors should hold off for now as the market is not in a good state.
Returns on Polkadot suffer
At the moment, the risk-adjusted returns (Sharpe Ratio) on Polkadot stand at negative 3.10, levels which were last noted back in July. Fear of another market collapse looms above investors’ heads following the August dip, and it is valid as well since most of the market is observing losses.
Polkadot sharpe ratio
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.
Recommended Content
Editors’ Picks
MANTA suffers 4% pullback after unlocking tokens worth $40 million
Manta Network (MANTA) unlocked over 8% of its circulating supply on Thursday. The unlocked tokens were airdropped and distributed in public sale, according to data from Tokenunlocks.
XRP struggles to recover as lingering Ripple lawsuit could reach Supreme Court, former SEC litigator says
The SEC vs. Ripple potential showdown at the Supreme Court is likely, says former SEC litigator Ladan Stewart. XRP Ledger calls developers, businesses and investors to build on the blockchain, extending Apex 2024 registration until April 30.
Bitcoin Layer 2 Merlin chain TVL climbs 20%, defying broad market correction
Merlin chain’s TVL added 20% this week, and crossed $800 million on Thursday. Bitcoin Layer 2 assets noted double-digit losses in the past week. Stacks, Elastos, SatoshiVM, BVM are hit by a correction as Bitcoin hovers around $61,000.
If Bitcoin restarts bull run, these altcoins are likely to explode Premium
If Bitcoin’s consolidation ends and the bull run resumes, altcoins are likely going to trigger a massive rally. Last cycle’s hot tokens like SOL, AVAX, WIF, ONDO, etc., could see renewed enthusiasm.
Bitcoin: BTC’s rangebound movement leaves traders confused
Bitcoin (BTC) price has been hovering around the $70,000 psychological level for a few weeks, resulting in a rangebound movement. This development could lead to a massive liquidation on either side before a directional move is established.