Polkadot: My Trading Plan and Where is the Bottom?From my point, Polkadot is one of the most interesting assets in the crypto market. It has very strong fundamentals as well as a good room for upward movement. Several weeks ago, we could discuss the potential top around 100$-150$ in the bullish market. Today, probably the ATH will be the perfect target for 2021 and the beginning of 2022.
Let's look at the daily chart and try to plan our future trading based on the price action at the key levels and signals from indicators.
The price moved downward from 55$ and bounced from the key support between 26.504 and 24.85$. This support is very important for the market. Just look at the price action around these levels in the past.
The prices bounced from the key support several times. We could say that the price reached the bottom. Also, if we use the Fib tool, we can see that the price reached 0.618 level. It shows a deep correction in the trend market.
RSI reached the oversold zone and confirmed the price reversal.
The same goes for the MACD histogram. The candlestick patterns supported the price reversal as well.
The market had everything to start a new upward movement the direction of the main trend from this support. But every time the price started the upward movement and built the bullish structure in the hourly timeframes, we could see bearish pressure and further downward movement to the support. For me, it is a sign that manipulators are not going to push the price upward. They are not ready. Probably they have another plan.
How to plan future trades?
From my point, there is not much sense to continue the downward movement as the market doesn't have much room for it. Maybe an additional 5-10% below the support will be possible. If we use the Fib tool again, the lowest level for a correction movement is 0.786, and it is 20$. In many markets, such deep correction will tell about a trend reversal. But the crypto market is a high volatility market, and we could see such deep corrections, but the market stayed bullish. I would like to consider 20$ and 0.786 Fib level as the 2nd bottom, but I don't see any fundamental reasons to reach that level at least right now.
I think the most logical movement will be to show a breakout below the key support in order to kick as many retail traders from the market as possible. The manipulators can push the price below 24.85$ in order to reach stop orders of those traders who have long positions and margin traders. It is easy money and why not take them? After that, the manipulators can push the price upward. We will see a false breakout below the support and maybe a daily candle with a long wick on the chart. If so, it will be a strong bullish signal.
My trading plan is the following:
1. A new reversal from the support will give me trade opportunities for buying.
2. A false breakout below the support will give me new trade opportunities for buying.
3. A breakout below 24.85$ will close my long positions by stop, and I will wait for new trade opportunities from 20$ and 10$ levels.
And what about you? How are you going to trade if the price moves up? How are you going to manage your active positions if the price moves down? Share in the comments, let's discuss.
Thanks for your attention! I hope this post will give you a better understanding how the market will be able to move further and you will plan your trades properly. Also, I will be grateful if you support my work by smashing the LIKE button! It motivates me to continue my work on this platform. Have good trades!
