Polkadot price rallies 5% on Tuesday, while risk builds Bitcoin rally provides wrong-footed sense of safety


  • Polkadot price jumps higher and shoots through important moving average.
  • Altcoins dragged higher as Bitcoin rallies over 8% at the same time.
  • The risk of wrong perception could see DOT collapsing back to $5.80.

Polkadot (DOT) price is slicing through the bears' territory as a knife through butter this Tuesday. Altcoins are trading higher as big brother Bitcoin is trading another profitable day with an over 8% gain on the books. Bitcoin and its siblings are trading higher as investors formed the assumption that the Fed will bail out any crypto collapse as they bailed out a US bank with big ties to cryptocurrencies.

Polkadot traders need to ask themselves if this rally is sustainable 

Polkadot price is trading another nudge higher deep into the overbought area. The rally gets underway as Bitcoin jumps another 8% this Tuesday. Investors and crypto participants have retained the feeling that the Fed will bail them out as the Fed already bailed out a crypto-sensitive bank over the weekend and made whole on all deposits.

DOT investors must question themselves if the Fed and the US Treasury will do this for each and every regional bank with ties to cryptocurrencies. It gives them a false sense of safety and might soon see reality kick in with DOT set to drop back below $6.23 and to $5.74. It would mean that bulls who are jumping in now at this pop above $6.23 are carrying a very big risk of a bull squeeze with  more than 11% of losses at hand.

DOT/USD  4H-chart    

DOT/USD  4H-chart    

Should markets keep supporting this sense of safety and should the situation remain contained to just Silicon Valley Bank and New York Signature Bank, expect to see the tail risk diminish. Price action has the opportunity here to trade higher. That would mean another 25% higher revaluation for DOT and see it around $7.80. From there some profit-taking would happen and could see a fade in search of support around $7.60 with the monthly R1 resistance overturned into support.


Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Recommended content


Recommended Content

Editors’ Picks

Polygon joins forces with WSPN to expand stablecoin adoption

Polygon joins forces with WSPN to expand stablecoin adoption

WSPN, a stablecoin infrastructure company based in Singapore, has teamed up with Polygon Labs to make its stablecoin, WUSD, more useful in payment and decentralized finance.

More Cryptocurrencies News
Coinbase envisages listing of more meme coins amid regulatory optimism

Coinbase envisages listing of more meme coins amid regulatory optimism

Donald Trump's expected return to the White House creates excitement in the cryptocurrency sector, especially at Coinbase, the largest US-based crypto exchange. The platform is optimistic that the new administration will focus on regulatory clarity, which could lead to more token listings, including popular meme coins.

More Crypto News
Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B

Cardano's ADA leaps to 2.5-year high of 90 cents as whale holdings exceed $12B

As Bitcoin (BTC) gets closer to the $100,000 mark for the first time — it crossed $99,000 earlier Friday — capital is rotating into alternative cryptocurrencies, creating a buzz in the broader crypto market.

More Bitcoin News
Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu holders withdraw 1.67 trillion SHIB tokens from exchange

Shiba Inu trades slightly higher, around $0.000024, on Thursday after declining more than 5% the previous week. SHIB’s on-chain metrics project a bullish outlook as holders accumulate recent dips, and dormant wallets are on the move, all pointing to a recovery in the cards.

More Shiba Inu News
Bitcoin: Rally expected to continue as BTC nears $100K

Bitcoin: Rally expected to continue as BTC nears $100K

Bitcoin (BTC) reached a new all-time high of $99,419, just inches away from the $100K milestone and has rallied over 9% so far this week. This bullish momentum was supported by the rising Bitcoin spot Exchange Traded Funds (ETF), which accounted for over $2.8 billion inflow until Thursday. BlackRock and Grayscale’s recent launch of the Bitcoin ETF options also fueled the rally this week. 

Read full analysis
Best Forex Brokers with Low Spreads

Best Forex Brokers with Low Spreads

VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.

Read More

BTC

ETH

XRP