Fading rallies will continue to be the way forward.
Polkadot continues to trend lower as the market is threatening to break down through the $14 level. The $14 level is an area that has been tested a few times over the last couple of days, but quite frankly this is a market that will almost certainly break down through that level. The market looks very likely to continue going lower, perhaps down to the $10 level.
Polkadot is suffering at the hands of the general negativity that is found throughout the crypto markets, as Bitcoin has gotten hammered, Ethereum has gotten hammered, and just about every other chart I looked at this morning all fell. The risk appetite is failing across the board, and it is obvious that crypto is going to continue to suffer at the hands of this. As Polkadot is an altcoin, it will likely have an outsized loss in comparison to the bigger markets.
At the $18.75 level, the 50 Day EMA is sloping lower. Above there, we have the 200 Day EMA which is sitting at the $23 region. I believe the area between both of these moving averages will continue to offer selling pressure. The market does not look like it is going to reverse anytime soon, but if we start to see money flow back into Bitcoin, that might be the first sign that we are going to rally. Polkadot continues to be sold, and at this point, it comes down to whether or not the coin is ever going to attract enough in the way of use. If Bitcoin breaks down below the $30,000 level, I suspect that another market such as Polkadot is going to continue to be toxic, so I would have no interest in buying this market.
However, if Polkadot drops down to the $10 level, we may see the market try to build a little bit of a base. Looking at the overall markets, I suspect that we are getting dangerously close to “crypto winter”, which will be toxic for this market. However, crypto winter ends and we will likely see some of these coins rally quite significantly afterward. If you have a longer-term time horizon, you might have the ability to pick up a bit of value, but I think you have plenty of time to do so. Fading rallies will continue to be the way forward.