An update on Polkadot (Big Picture) (26.02.2022)

Casual Klaus

Published in

Coinmonks

3 min readFeb 26, 2022

Let’s update our big picture examination of Polkadot.

Polkadot’s daily chart on 26th February 2022

Massive sell-off and recovery

Following the horrible events in the Ukraine, most crypto assets saw massive dumps, followed by a similar massive intraday rally. Positive intraday reversals, as seen here on 24.02.2022, are often bullish events, although it is hard to determine if they affect only the short-term or also the long-term time frames.

As seen on the 1h chart, the price dumped within less than 24 hours by approximately 20 percent. Since then, Polkadot recovered by 33% and is now actually trading nearly 8% above the level where the sell-off began.

Primary and secondary trend

For now, bulls can relax a little bit. But what about the long-term uptrend and the secondary downtrend?

Primary trend for DOT/USD

As seen on the chart above, the blue long-term trendline was broken (circle). Afterwards, the price reversed and the current daily cancle retestet the blue trendline (circle).

Since the current higher-low during the sell-off is still above the last higher-low, the long-term uptrend is still valid, although it became a small crack.

For me, this trendline is no longer valid, though, and thus it can no longer serve as an orientation.

Instead, the new low from the sell-off can be the third touch of another trendline, which is now the last valid trendline at least I can see on the daily chart, that describes the current primary trend best:

Polkadot chart: Last obvious and valid trendline that has not been breached yet

Needless to say, that if the price breaks through this trendline, the price is expected to drop to 10,362 USD — the level of the previous higher-low. For me, the long-term uptrend would then be invalid.

Secondary trend for DOT/USD

Polkadot daily chart showing the current correction

The secondary trend is still a downtrend, with a series of falling lows and highs. After the sell-off, the area between 16–17 USD was regained. But the current daily candle fails to break above the daily SMA20, which is usually a sign that on the short term, the bears have the upper hand.

What levels are important now?

It would be bullish sign if the price would remain above 16,945 and then trade above the SMA20. This would be the precondition for overcoming the next area of resistance (grey bar between 22 and 24 USD).

An extreme bullish and pro-cyclical sign would then be if the price managed to trade above 32,9 USD, breaking the current secondary trend by forming a significant new higher-high and higher-low (related to the secondary trend).

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