DOT/USD Forecast: Polkadot Breaks Significant Support

Christopher Lewis

It certainly looks as if we are going to get the opportunity to buy at lower levels.

Polkadot broke lower on Friday as we continue to see anything risk related get absolutely hammered. That is fine, because most crypto traders are longer-term traders and investors. This should give you an opportunity to pick up a little bit of value given enough time. That being said, there is absolutely nothing here to suggest that you should be a buyer. The market is closing near the $21.30 level and closing towards the bottom of the candlestick. This almost always means that there should be a bit of follow-through, so I think you need to be very cautious about the idea of trying to step in and catch this falling knife.

That being said, you need to pay close attention to Bitcoin. Unfortunately, all crypto markets run in tandem these days, as the Bitcoin market is most certainly the leader of everything else, and it does suggest that we need to see that market show signs of bullish pressure so that everybody else will be willing to step in and pick things up. The market continues to be very skittish and is being thrown around due to to the idea of the Federal Reserve stepping in and tightening monetary policy.

The tightening monetary policy has people taking out money of the market and, when it comes to risk appetite, it falls apart. This is a market that will be considered to be “highly sensitive to risk”, as Polkadot is one of the riskier coins out there due to the fact that it is relatively new. That being said, this is a market that I think will give you value eventually if you are willing to simply wait for stabilization. Furthermore, you do not want to jump in with both feet, so you need to be small with your initial position size, and then perhaps add if the market goes in your favor. If things get really ugly, we could see Polkadot reach as low as $15, maybe even $10. At that point, with all of the projects and interest in Polkadot that I see, I would be willing to jump in and start accumulating a bigger position for a longer-term investment. Regardless, it certainly looks as if we are going to get the opportunity to buy at lower levels.

DOT/USD

Christopher Lewis

Christopher Lewis has been trading Forex for several years. He writes about Forex for many online publications, including his own site, aptly named The Trader Guy.

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