Certainly a welcome change for those who work in crypto. Despite widespread doom and gloom, Polkadot native coin, DOT, has become the most discussed cryptocurrency in the community. Still, that’s not the end of the good news.
A recent tweet by @PolkadotInsider explained how Polkadot has more active developers than Ethereum. This demonstrates the ecosystem’s widespread appeal within the cryptocurrency sector as Polkadot is able to secure the top top spot in terms of development activity this month.
However, the question of whether or not DOT is a solid buy in the present needs to be addressed. In the meantime, with this decent achievement – is it a good time to go long on the crypto?
— 🇺🇦 CryptoDep #StandWithUkraine 🇺🇦 (@Crypto_Dep) November 19, 2022
Polkadot Falls Short In Hitting New Peaks
The crypto market, as you may be aware, is now witnessing a bearish market mood takeover due to external factors of uncertainty and doubt.
All expectation of a DOT-beneficial relief rally in the near future has been dashed.
DOT’s value has decreased significantly over all time frames, but it has lost 23.7% in the past two weeks, as measured by CoinGecko.
As of right now, the token is selling for $5.15, which is a loss. Correlations with Bitcoin and Ethereum, two of the most popular cryptocurrencies, show that its price is tracking the market as a whole.
This could result in a catastrophe for DOT. If its association with BTC and ETH continues to decline, it will be dragged down with them.
As of the time of writing, the correlation between DOT and both ETH and BTC is 0.96, indicating that it will definitely move in the same direction as ETH and BTC.
RSI readings are also declining, with the indicator moving into the oversold region. The fact that the token’s price has never risen above the 50s portends a bleak outlook for its immediate future.
DOT is a DON’T Purchase, For Now
The downtrend is backed by lower lows and lower highs, as well as a widening Bollinger band, which indicates increased market volatility in the immediate future.
In the following days, the EMA ribbon provides a convincing signal for short positions as the price continues to decline.
As prices decline, short positions would be the most profitable strategy for investors and traders in this bear market.
As the price approaches the 161.80 Fibonacci retracement level, investors and traders with a buy-low, sell-high mentality should be cautious, as a near-term rally is unlikely.
Even with the good development activity and social activity of the ecosystem, these will not be sufficient if the market as a whole is in recession.
DOT total market cap at $5.9 billion on the weekend chart | Featured image from Medium, Chart: TradingView.com