Cryptocurrency analyst Ali has recently highlighted a potential decline in the price of Polkadot (DOT) based on a sell signal observed in its weekly price chart. By utilizing the TD Sequential tool, commonly used for identifying reversal points in asset prices, Ali suggests that Polkadot may experience a significant drop. This article delves into the technical analysis provided by Ali and explores the implications for Polkadot’s future.
The TD Sequential Tool
The TD Sequential tool consists of two phases: the setup and the countdown. In the setup phase, candles of the same polarity are counted up to nine. If this setup phase completes with a trend towards an upward movement, it may indicate a potential top. Conversely, if the price has been declining, a bottom might be inferred. Following the setup phase, the countdown phase begins and lasts for thirteen candles. The completion of this phase may suggest another probable reversal.
According to Ali’s analysis, Polkadot’s weekly price chart has recently completed the TD Sequential setup phase with green candles. This completion implies the formation of a sell signal for the cryptocurrency. Additionally, Ali includes a graph demonstrating the 100-day exponential moving average (EMA), which has historically acted as a level of resistance for Polkadot. The completion of the TD Sequential setup aligns with Polkadot approaching the 100-day EMA, contributing to the likelihood of a sell-off.
Based on these technical signals, Ali suggests that Polkadot could experience a drop to $7.50. Such a decline would represent a decrease of over 18% from the current spot price. However, despite the bearish developments, Polkadot has demonstrated continued upward movement in the past day, surpassing the $9.2 level. A chart depicting the recent performance of Polkadot illustrates its substantial growth during the past month.
Although Polkadot has enjoyed significant bullish momentum in the past week, the technical obstacles presented by TD Sequential and the 100-day EMA suggest that a top may be approaching for the cryptocurrency. While the green returns in the last 24 hours indicate ongoing positive momentum, the potential resistance ahead should be closely monitored.
The analysis provided by Ali raises concerns about a possible decline in the price of Polkadot. The completion of the TD Sequential setup, coupled with the proximity to the 100-day EMA, suggests a sell signal for the cryptocurrency. However, Polkadot has proven resilient and continues to demonstrate upward movement in the short term. Traders and investors should exercise caution and conduct their own research before making any investment decisions in this dynamic market.
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