DOT / USD: Harmful waters swirl quick as bears goal lows – DailyForex.com
DOT / USD is crossing important support as the bearish momentum shows signs of building within the cryptocurrency.
DOT / USD is down again on the past trading day, hovering above key support levels which, if vulnerable, could trigger additional selling for Polkadot. DOT / USD is trading near the 21.3000 level earlier this morning and tested below the 20.0000 level last day. Polkadot swims in dangerous waters and if the 20,000 is broken lower and more sustained, speculators who have chosen to bet on a resurgence of bullish sentiment could find the tide is too strong and is going down.
While cryptocurrency speculators have proven bullish over the past six months, the past four weeks have been extremely difficult when looking to buy positions. After hitting a high of around 49.5000 on May 15, DOT / USD was hit by a strong sell-off. Oddly enough, Polkadot is now hovering near the support levels seen from the second week of February. Technically, speculators have plenty of reasons to suspect that lower targets might come into play if DOT / USD breaks the 21.0000 and 20.0000 lines and the general sentiment in the cryptocurrency market remains fragile.
From a risk-reward perspective, when looking at technical charts, traders may conclude that short-term indicators suggest that there is more scope to explore down than the potential for upward movement. Certainly, DOT / USD could stage a sudden comeback, demonstrating higher move that overcomes current resistance levels. However, speculators should wonder if they really want to challenge the prevailing trend.
Traders selling DOT / USD shouldn’t be too greedy with their goals. In other words, while negative sentiment can permeate the broad cryptocurrency market, traders shouldn’t set unrealistic goals. It is better to cash in on winning trades before “virtual” profits disappear due to a sudden upward trend reversal, which then creates the temptation to hold a trade open longer than expected. Using adequate take profit orders and entering them securely into the trading platform so they can call the register is a solid tactic.
DOT / USD continues to trade near the support and if the nearby transition times of 9:00 p.m. to 8:00 p.m. don’t hold, sales could pick up. Cautious traders may want to sell higher on slight reversals, but if they choose to be aggressive this cannot be faulted. Using nearby resistance levels as stop loss ratios could be effective in the short term.
Short term outlook for Polkadot:
Current resistance: 22.6300
Current support: 20.5000
High goal: 23,3300
Low goal: 16,3500