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Polygon (MATIC)
Above: Polygon (MATICUSD)
Polygon (MATIC) experienced the same sell-off the broader market faced yesterday (September 7th, 2021). It remains well off those lows, moving from a low of $1.06 to the current close at $1.35. However, I think caution should be the name of the game here. Polygon is currently below the daily Tenkan-Sen and Kijun-Sen, but above Senkou Span A and Senkou Span B. Essentially, Polygon is trading between two strong support and resistance levels. The key indicator in the Ichimoku system that will help determine a directional bias is the Chikou Span. It’s the final cog in the wheel to make any trend work. For bulls, the Chikou Span needs to remain above the body of the candlesticks. For bears, the Chikou Span needs to be below the body of the candlesticks. Currently, the Chikou Span is inside the a daily candle. But when the Thursday candlestick forms and if Polygon is still trading at $1.3555, the Chikou Span will then be below the candlesticks – creating very, very bearish conditions. Bulls need to push Polygon up to the $1.52 value area and close at that level to continue any bullish momentum. Otherwise, we could see a big drop here very soon.
Polkadot (DOT)
Above: Polkadot (DOTUSD)
Similar to Polygon’s chart, Polkadot (DOT) has a current daily close that is almost right on top of the Tenkan-Sen and Kijun-Sen. But unlike Polygon’s chart, Polkadot had a Chikou Span that is above the candlesticks and looks like it could continue to push higher. The RSI is sitting right on top of the first oversold condition in bull market (50). This is the first time Polkadot’s daily RSI has tested 50 as support since it broke out above the 50 level on July 28th, 2021. We could a see a move lower because of the regular bearish divergence between the RSI and the candlestick chart. The Composite Index has crossed below both of its average – a very bearish warning sign. If the Composite Index creates a low below the August 26th Composite Index low, but price fails to make new low below the August 26th price then we’ll have some nice hidden bullish divergence which could halt any further corrective move. The key level I am watching for a confirmation move lower is where the %B ends up. It’s currently in neutral territory. Hwover, if the %B drops below 0.2 and the RSI remains above 40, then a major, major drop is likely to occur. I think its important, right now at least, to pay attention to what risk-on markets outside of cryptocurrencies doing. Markets like the stock market, oil, and futures. If we start to see a sell off in equity markets, cryptocurrencies are likely to follow suit.
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