Definitely a welcome change for those working in crypto. Despite the widespread doom and gloom, Polkadot native coin, DOT, has become the most talked about cryptocurrency in the community. Still, this is not the end of the good news.
A recent tweet by @PolkadotInsider explains how Polkadot has more active developers than Ethereum. This demonstrates the wider appeal of the ecosystem within the cryptocurrency sector as Polkadot has been able to secure the top spot this month in terms of development activity.
However, the question of whether or not DOT is currently a solid buy needs to be addressed. Meanwhile, with this nice achievement – is it a good time to go long on crypto?
– 🇺🇦 CryptoDep #StandWithUkraine 🇺🇦 (@Crypto_Dep) November 19, 2022
Polkadot lags behind in reaching new peaks
The crypto market, as you may be aware, is now witnessing a bearish market mood due to external factors of uncertainty and doubt.
All hopes of a DOT-profitable relief rally in the near future have been dashed.
The value of DOT is fell short of Significantly across all timeframes, but it has lost 23.7% over the past two weeks, as measured by CoinGecko.
At the moment, the token is selling for $5.15, which is a loss. The correlation with Bitcoin and Ethereum, the two most popular cryptocurrencies, shows that its price is tracking the overall market.
This could spell disaster for the DOT. If its correlation 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.
The RSI reading is also declining, with the indicator moving into the oversold zone. The fact that the coin’s price has never risen above the 50s indicates a bleak outlook for its immediate future.
DOT is a don’t buy for now
The downtrend is supported by lower lows and lower highs as well as a widening Bollinger Band, which indicates volatility in the market in the immediate future.
Later in the day, the EMA ribbon provides a solid signal for short positions as the price continues to decline.
As prices decline, short positions will be the most profitable strategy for investors and traders in this bear market.
Investors and traders with a buy-low, sell-high mindset should remain cautious as the price approaches the 161.80 Fibonacci retracement level, as a near-term rally is unlikely.
Even with good development activity and the social activity of the ecosystem, these will not be enough if the market is in a bearish mood as a whole.
DOT total market cap at $5.9 billion on the weekend chart | Featured image from Medium, Chart: TradingView.com
Credit : newsbtc.com