In the past two trading sessions, Polkadot’s price dropped by more than 5 per cent, partly due to controversy surrounding the cryptocurrency industry and the FTX’s FTT token collapse that has wiped billions of dollars of FTX market capitalization.
However, today, the prices seem to be recovering, and Polkadot is up by over 6 per cent at press time. The current price gains have seen Polkadot anchor from trading in tandem with the industry for the first time this week and instead chatting its own way, with the industry already down by 6 per cent.
However, despite trading against the tide, the Polkadot price still remains in a precarious position, considering most of its long-term moves have been in tandem with the industry. This means that at some point, if the industry continues to fall, then we should expect to also see Polkadot prices starting to trade in tandem with the industry. It will also result in Polkadot’s prices getting dragged down due to its significant correlation with the industry.
Looking at the chart below, today’s 6 per cent gain in the markets looks like a fluke, especially considering it comes at the heel of the crypto dropping by more than 5 per cent in hours. The chart also shows the current price surge to likely be a price retracement rather than a price reversal from the past 48 hours.
Therefore, I am still bearish on Polkadot and expect the prices to reverse and continue with the downside trend. This is partly due to fundamental factors such as the aggressively bearish cryptocurrency industry and the second-biggest cryptocurrency exchange industry in the world going into bankruptcy. There is a high likelihood that we might see prices dropping below the $5 price level again. However, if the current trend hits the $6.3 price level, then my bearish analysis will be invalidated.
This post was last modified on Nov 10, 2022, 11:19 GMT 11:19