The Polkadot price fell sharply yesterday as a sudden surge in selling pressure wiped billions from the cryptocurrency market. Polkadot (DOT) dropped from a four-month high of $47.47 to $38.33 yesterday as Bitcoin’s fall from grace encouraged the liquidation of altcoins. This morning, DOT is stable at $40.90 (+1.00%), lifting its market cap back to $49 billion, ranking it the 8th-largest cryptocurrency.
After a week clinging to the psychological $60,000 support, Bitcoin finally broke down, reaching an intraday low of $58,100 yesterday. As a result, most top-tier altcoins suffered material losses. Despite the violent selling, the crypto complex is calm this morning as tentative buyers take advantage of the discounts. However, BTC is walking a tightrope and is vulnerable to another phase of liquidation. In that event, the Polkadot price could be in for more volatility. Nonetheless, the technicals remain constructive for now, and if BTC flips $60k, it could fuel an explosive move higher for DOT.
The daily chart shows the Polkadot price is trending higher in a rising wedge formation. Coincidentally, DOT tested the top edge of the pattern at $47.30 just as the selling hit. Therefore, the rising trend, now at $47.80, is the first obstacle on the upside. Successful clearance of the trend targets the all-time high of $50.75. Above that, bullish momentum could lift DOT into the $60 range.
If BTC gains bearish traction below $58,000, I expect Polkadot to test the lower edge of the wedge pattern at $35.60. Additionally, the 50-DMA at $35.39 reinforces the scale down support. If DOT loses the 50-DMA on a closing basis, an extension towards the 100-day at $29.08 and the 200 at $27.56 should follow,
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This post was last modified on Oct 28, 2021, 02:04 BST 02:04