Short Idea for Polkadot (DOT)Polkadot (DOT) broke down from a toppish broadening wedge last May 20, along with the rest of the cryptomarket. USD 28 which had served as support since February, was swiftly taken out by the bears. There's now 3 months worth of volume at the top weighing down on DOT.
Since the breakdown, the market has consolidated into a symmetrical triangle. Given that this is usually a continuation pattern, we're leaning on the downside. A break of this triangle would drive prices down to next major support, a decent opportunity to make profit. A clean break from this triangle at 18USD could push prices down to USD10 zone.
There are a couple of ways to play it:
1) Short a Quarterly Futures Contract. If you're willing to wait longer, you could short from within the triangle and close the position close to target. We're currently at the bottom of the triangle and waiting for higher prices such as USD 23/24 would improve our risk to reward ratio. Stop loss would be at USD26. This type of futures contract also saves you from funding costs on Binance.
2) Short a Perpetual Contract. If you're the type to wait for confirmation, a clean break at USD18 would be good opportunity to short with leverage.
3) If you're not into shorting, you can place a buy order near USD10. Support levels provide a good bounce opportunity.
