Bitcoin trending sideways, polkadot rises to new all-time high
The past trading week was marked by significant volatility on the overall market. The correction of the leading currency Bitcoin (BTC) also caused prices of altcoins to fall. Investors took advantage of this temporary price weakness in particular to increase their investments in cryptocurrencies from the DeFi sector.
In the afternoon of 11 January, the bullish rally on the crypto market briefly looked set to end. Positive investors took advantage of the price drop on the overall market for renewed entries and thus ensured a bottoming out for the time being. In particular, interest in cryptocurrencies in the Bitcoin Union DeFi sector is currently gaining significant momentum. Investors seem increasingly convinced of the potential of this fast-growing sector. Whether it is decentralised lending products or the increased interest in cross-chain solutions such as Polkadot (DOT): investors are increasingly investing in altcoins from this sector.
Price analysis based on the value pair DOT/USD on Binance
The price of the DeFi-Crosschain project Polkadot continues to know only one direction. After a price weakness at the beginning of the week, which caused the DOT price to briefly consolidate back into the upward channel, a bullish counterattack followed, which resulted in an 84% rise to USD 19.34. This brought the DOT price back within the range of the previous week. The DOT price thus reached the maximum medium-term price target in the form of the 461 Fibonacci extension within one week. Currently, the DOT price is consolidating slightly and is currently quoted at USD 16.81.
Bullish variant (Polkadot)
The bull herd has done a great job in the past trading week. The DOT price turned upwards above the central support at USD 7.06 and shot significantly northwards in the following days. The previous all-time high at USD 10.66 was pulverised, as were possible reversal points at USD 14.50 and USD 15.66. At the peak, Polkadot reached the top of the range. At its peak, Polkadot reached a new all-time high at 19.34 USD. Yesterday, Sunday 17 January, a consolidation started which pushed the DOT price back below the 423 Fibonacci retracement at 17.73 USD. For the time being, at least, the price rally seems to be paused. Should the price correct further and come back below the 361 Fibonacci extension to the important support at USD 14.54, there are new opportunities for a rise from this level towards the all-time high.
A correction to the horizontal support line at USD 13.12 would also be unproblematic from a bull perspective. Should Polkadot also dynamically undercut these support lines, strong resistance from the bull camp is to be expected at the latest at the EMA20 (red) at 11.75 USD. Investors will try to push the price back above 14.54 USD. If Polkadot stabilises above this price level on the daily closing price, new attack attempts in the direction of USD 15.66 and especially USD 17.73 can be expected. If this resistance is also dynamically overcome, the area around the all-time high above USD 19.02 will once again come into the focus of investors. If the DeFi sector continues to develop positively, a rise to the 561 Fibonacci extension at USD 22.37 is also conceivable. For the time being, this price level should be seen as the maximum target for the coming week.
Bearish variant (Polkadot)
If, on the other hand, the DOT price extends its price correction and the EMA20 (red) is undercut on the daily closing price, this would be seen as the first sign of weakness. The first price target on the downside would be the high at 10.66 USD. The super trend in the daily chart also runs in this area, which is why bullish investors will try to take the reins again. If, on the other hand, the DOT price slips below this key support on the daily closing price, a correction to USD 8.95 is to be expected. The 161 Fibonacci extension and the upper edge of the trend channel are located at this cross support.
If this support is also dynamically undercut, an extension of the correction back to USD 7.89 is conceivable. A retest of the weekly low at USD 7.20 should also not be ruled out. This is the EMA100 (yellow). Only if this support level is also sustainably broken downwards will the maximum bearish price target at USD 6.16 be activated. As long as the price of Polkadot remains above the green trend channel, the bullish scenario of a temporary consolidation is much more likely.
Indicators (Polkadot): RSI reduces overbought condition, MACD with active buy signal
The RSI is currently trending slightly southwards in the daily chart, but with a value of 72 it still has a buy signal. The same applies to the MACD indicator, which also has a buy signal.
Worst price performance among the top 10 altcoins:
Similar to most other cryptocurrencies, the price of Bitcoin Cash suffered a significant setback at the beginning of the week. After reaching a new 52-week high of USD 626 on 10 January, the BCH price subsequently corrected back to the important support at USD 403. On a daily basis, BCH defended the EMA20 (red) and is currently rising back towards USD 520. On a weekly basis, the BCH price corrected by around 20 percentage points in the meantime.
Bullish variant (Bitcoin Cash)
In the last few hours of trading, Bitcoin Cash is trying to overcome the green downtrend line from the all-time high and head for the resistance at USD 520. If the BCH price reaches and overcomes this resistance on the daily close, a renewed attack on the yearly high in the area of the 127 Fibonacci extension is likely. If the 626 USD is broken upwards, a subsequent rise to the 138 Fibonacci extension at 669 USD on the way to the 161 Fibonacci extension at 760 USD can be expected. In the area of USD 760, investors are likely to collect more profits again. If the bulls manage to overcome this strong resistance dynamically, the maximum medium-term price targets at USD 885 and USD 909 will come into view. If the overall market continues to move northwards in the coming weeks, a price rise to USD 1,149 would not be out of the question in the medium term. This is the 261 Fibonacci extension.