After accomplishing a high of nearly 29.5000 on the 21st of August, DOT/USD has experienced a reversal lower the past couple of days. As of this writing the cryptocurrency is trading within sight of the 25.0000 juncture in typical fast conditions which are a staple of Polkadot. The broad cryptocurrency market has seen many the major digital assets stumble slightly off of their mid-term highs short term, so DOT/USD is not alone.
However, before a trader suspects I am here to proclaim the bull rally over in cryptocurrencies and that prices in the broad market are again going to face stiff headwinds in the coming days – I am not. Yes, DOT/USD could face a challenge from selling positions from speculators who have bought the cryptocurrency during this bullish surge, which has been demonstrated since the 20th of July as they look to cash out profits. Technically though the markets continue to show that more upside potential exists and quite possible could prove worthwhile to wager.
The highs of Monday when DOT/USD traded near the 29.5000 level touched values not seen since the 21st of May. The reversal lower which has ensued the past two days is now hovering near an important psychological level too.
The price of 25.0000 may prove to be a false signal; DOT/USD moves fast and the important support level traders who understand the swirls of volatility within Polkadot may really decide the 23.0000 juncture is critical. The 24.0000 level certainly comes before the 23.0000 ratio, but if the lower ratio crumbles than there might be a reason to suspect the bullish momentum displayed in DOT/USD is about to be sincerely challenged and maybe retired.
However if current price ratios remain stable and the 24.7500 to 24.5000 marks hold tight as support, this might be an indication further buying is going to develop. The point that speculators may perceive correctly if the market reverses higher again, is that the current wave of selling is a normal part of the cryptocurrency landscape.
There is no doubt that when things go wrong and bearish momentum builds and support levels are plundered that this can prove costly for traders pursuing the wrong direction. As always, appropriate risk management is urged, but buying DOT/USD on slight reversals lower while looking for upside action may be the best speculative wager short term.
Polkadot Short-Term Outlook
Current Resistance: 25.7000
Current Support: 24.1800
High Target: 28.2000
Low Target: 22.9100
