Bearish DOT/USD price forecast.
- Polkadot has reached a new low for the year
- The gains made in 2023 have disappeared due to the sale of DOT/USD by bears
- If Jerome Powell gives a hawkish speech today, the DOT/USD pair may experience further downside as indicated by a descending triangle
At the beginning of the year, the cryptocurrency market experienced a surge. After a bearish 2022, investors saw the start of the new year as the beginning of a new bull market. Bitcoin led the way and other cryptocurrencies followed suit. However, not all coins managed to close near their yearly highs. Polkadot, for example, has reached a new low for the year. Specifically, the DOT/USD pair has lost all of its 2023 gains and things are not looking good for investors.
This is especially true given that the Fed’s Chair Jerome Powell is set to testify today about the semi-annual monetary policy report in front of the Senate Banking Committee in Washington, D.C. Markets are eager to find out what he will say about the future funds rate. Any hawkish comments could cause the U.S. dollar to rise across the board, affecting not only fiat currencies but also cryptocurrencies.
In combination with the technical analysis, the bias is bearish, as indicated by a descending triangle.
- Alibaba appoints crypto-friendly chair after Daniel Zhang’s departure.
- Obadia, a top strategy researcher, is leaving Flashbots due to a strategic hiring push.
- Cardano may consolidate in this price zone before attempting a reversal.
Polkadot chart by TradingView
A descending triangle spells trouble for DOT/USD
A descending triangle is a bearish continuation pattern. Hence, the price action following the pattern should continue in the same direction as the main trend traveled.
The main trend is bearish, given the fact that DOT/USD dropped from above $52 at the peak of 2021 to the current $4.7.
To confirm the bearish pattern, the market should travel a distance equal to at least the longest segment of the triangle. Calculating it does not make sense, as it points to almost 0.
This does not mean that Polkadot will reach 0, but it does suggest that before buying cheaper coins, investors should consider the bigger picture and look for obvious trends on the chart. In this case, with 2023 gains gone and the presence of a descending triangle, the bias remains bearish and not bullish.