The market is likely to see a lot of noise more than anything else.
Polkadot fell hard on Monday as crypto got crushed. Polkadot is an altcoin, so that has a certain negative connotation to it. The market is significantly below the 50-day EMA, which is an indicator that a lot of people will pay close attention to. The size of the candlestick suggests that we are going to go lower, as it is rather large in comparison to the last several weeks, and it looks as if we are going to go looking towards the support level at the $16.50 level.
If we do break down below that level, then it is likely that we will go looking toward the $15 level. The $15 level is an area that would have a certain amount of psychological attention paid to it, and I think that there is probably a little bit of a bounce. If we break it down below there, the market will more than likely fall apart and collapse.
Alternatively, if we were to turn around and break above the 50-day EMA, the market will go looking to the $22.50 level. The 200-day EMA sits at the $24.35 level and offers a lot of psychological and structural resistance as well. Breaking above that indicator is a very bullish sign, but at this point, it does not look very likely to happen. Furthermore, you need to keep in mind that the rest of the crypto market needs to rally, especially Bitcoin and Ethereum. Those things drive the rest of the market, so you need to see strength in those “blue-chip coins.”
Another possibility is that we bounce around in the area between the two lines that I have on the chart, which would probably be a relatively bullish turn of events because it at least can get the markets to stabilize a bit. We have seen the weekend be very negative for the crypto markets, and we have been in a negative trend for quite some time. The market is one that even if we do turn around and go higher, you will need to be somewhat cautious, and you should have plenty of time to turn things around and build up a position. That being said, the market is likely to see a lot of noise more than anything else.
