The sentiment in the crypto market seems to be turning around, as cryptocurrencies have been climbing higher over the last few days. Bitcoin reversed from above $40,000, up to $50,000, while it appears that Polkadot might have resumed the bullish trend already, after making some decent gains last week, so let’s have a look at these two cryptos.
Polkadot Daily Chart Analysis – DOT Coin Moves Above Moving Averages
Polkadot, like most cross-chain network,s has shown great resilience since the end of the previous bullish period in July. As we mentioned in our 2021 Polkadot forecast, this crypto appreciated by nearly 400% from the bottom in July to the high in September, before the next bearish wave. It even pushed above the high of September 7, directly before the flash crash, when El Salvador introduced Bitcoin as legal tender in the country.
Let’s see if this latest bounce off the 200 SMA will take DOT/USD above $40
After the negative sentiment in the crypto market took its toll on all cryptos during most of September, cross-chain networks like Polkadot are now showing resilience again. The 200 SMA (purple) turned into great support for DOT/USD on the daily chart – this crypto has already bounced off this level three times.
Yesterday Polkadot formed an upside-down pin candlestick, after pushing above the 20 SMA (gray) last week, so this moving average and the 50 SMA (yellow) faild to turn from support into resistance. But the pin candlestick is a reversing signal, and the stochastic indicator is reversing from almost overbought levels.
But this time, the third bounce might be a real one, which means that Polkadot has resumed/will resume the bullish trend. The sentiment in the crypto market seems quite positive, which will help DOT push further to the upside. Polkadot continues to attract users and developers into their network, with the ecosystem’s low-latency and high throughput network, which uses a sharding system that helps with faster and cheaper transactions. It is progressing further ahead though, with the “canary network” Kusama, which started the second batch of para-chain auctions a month ago.
A lot of projects that are building on Kusama should have a fully dedicated para-chain slot, but not everyone is going to get a slot. This leads to an increased demand for Polkadot and the DOT coins. The fundamentals are bullish, so as long as the sentiment remains positive, DOT/USD should soon run higher, above the September highs. We need to watch the resistance zone below $40, and if it goes, then those who are long on Polkadot should hold onto their trades.