A cryptocurrency analyst has recently highlighted Polkadot’s potential decline based on a sell signal forming in its weekly price chart. The analyst, Ali, points out the TD Sequential sell signal, which is a tool commonly used in technical analysis to identify possible points of reversal in an asset’s price.
The TD Sequential indicator consists of two phases. The first phase, known as the setup, involves counting candles of the same polarity up to nine. If the setup completes with a trend towards the up, indicated by nine green candles, it may suggest that the asset has reached a top. Conversely, if the price has been decreasing, it could indicate a bottom. The second phase, called the countdown, begins after the setup and lasts for thirteen candles. At the end of this phase, another potential reversal in the asset’s price can be assumed.
Polkadot’s weekly price chart reveals the completion of a TD Sequential setup phase, as depicted by the presence of green candles. This completion indicates a potential sell signal for the cryptocurrency.
Resistance at the 100-day EMA
Alongside the TD Sequential setup, Ali also presents data for Polkadot’s 100-day exponential moving average (EMA), which has acted as a resistance level in the past. Interestingly, the completion of the TD Sequential setup coincides with the cryptocurrency’s approach to the 100-day EMA.
The analyst suggests that this alignment could result in profit-taking, potentially driving Polkadot down to $7.50. Such a decline would represent a significant drop of over 18% from the current spot price.
Recent Performance and Potential Bearish Trend
Despite the bearish developments in Polkadot’s weekly price, the asset has continued to rise over the past day, surging above the $9.2 level. However, it is essential to consider the technical obstacles presented by the TD Sequential and 100-day EMA, as they could indicate that the coin may be approaching its peak.
Examining Polkadot’s performance over the past month, it is evident that the asset has experienced substantial growth. The recent green returns during the past 24 hours reflect a continuation of the bullish momentum observed throughout the week, resulting in a commendable 39% increase.
The TD Sequential sell signal in Polkadot’s weekly price chart, accompanied by its proximity to the 100-day EMA, has raised concerns among analysts. While the cryptocurrency has seen impressive gains in recent days, the sell signal and technical obstacles suggest that a potential decline may be on the horizon.
This article serves as an educational resource and does not constitute investment advice. It is crucial to conduct thorough research and consider risks before making any investment decisions.