However, confirmation of the reversal higher requires a move above the Asian session high of $21.05. Therefore, seasoned traders are likely to wait on the sidelines for the time being, waiting for a move above $21.05 to materialize before entering a long position. The cryptocurrency, however, ended the week with 14% gains at $20.47, forming an inverted hammer with a long upper wick and small body. The pattern has appeared after a notable sell-off and signals a potential bullish reversal.
Price chart: Weekly and daily Source www.thestreet.com
This is a guest post. Investing in cryptocurrencies is speculative and investors should carefully conduct all research and diligence before making trades.
The immediate resistance is $26.50 (April low), followed by $28.14, marked by the downward trending 5-week SMA (simple moving average). Support is seen at $17.10 (last week’s low). A break lower would expose the May 23 low of $13.81. Technical indicators support the case for a price bounce. The weekly stochastic has entered oversold territory below 20, meaning the market is over-extended to the downside. Meanwhile, the daily chart MACD histogram is printing higher lows below the zero line, a sign of weakening of the downward momentum.
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