Polkadot, a prominent cryptocurrency, is showing a bearish signal according to an analyst who predicts a potential drawdown to a specific target. The analyst explains that a TD Sequential sell signal has recently formed in Polkadot’s weekly price chart. The TD Sequential is a tool used in technical analysis to identify potential reversal points in an asset’s price.
The TD Sequential consists of two phases. In the setup phase, candles of the same polarity are counted up to 9. After the ninth candle, a possible price reversal could be anticipated. If the setup phase occurs with an overall upward trend (green candles), it could indicate a top in the asset’s price. Conversely, if the price has been declining, it could suggest a bottom.
The second phase, called the “countdown,” begins after the setup phase and lasts for thirteen candles. At the end of these thirteen candles, another potential price reversal could occur.
Polkadot’s weekly price has recently completed a TD Sequential setup phase with green candles, indicating a sell signal for the cryptocurrency. The analyst also notes that the price is approaching the 100-day exponential moving average (EMA), which has acted as resistance in the past.
Based on these observations, the analyst suggests that there could be a spike in profit-taking, potentially leading to a drop in Polkadot’s price to $7.50. This would represent a decrease of over 18% from the current price.
Despite these bearish developments, Polkadot’s price has continued to rise in the past day, clearing the $9.2 level. The graph displayed in the article shows Polkadot’s performance over the past month, with significant bullish momentum observed.
However, the technical obstacles presented by the TD Sequential and the 100-day EMA could indicate that a top is approaching for Polkadot.
Please note that the article is for educational purposes only and should not be considered as financial advice. It’s essential to conduct thorough research before making any investment decisions. Investing carries risks, and any actions taken should be done at your own discretion.