- Polkadot hits new lows for the year
- All 2023 gains wiped out as the bears continue to sell DOT/USD
- If Jerome Powell makes a hawkish speech today, the downward triangle will point to further downside for the DOT/USD pair
The cryptocurrency market rose early in the year. Following a bearish 2022, investors saw the start of the new year as the beginning of a new bull market.
Bitcoin led the way, followed by other cryptocurrencies. However, not all coins were able to close near their yearly highs.
For example, the Polkadot has made new lows for the year. More precisely, the DOT/USD pair has returned all his 2023 gains and things are not looking good for investors.
This is especially true ahead of Fed Chairman Jerome Powell’s testimony scheduled today. He is due to testify before the Senate Banking Committee in Washington, DC later today about the semi-annual monetary policy report, and the market will be watching to see what he says about future fund rates.
Any hawkish comments should boost the USD across the board. Not only fiat currencies, but also cryptocurrencies react.
Combined with the technical analysis chart, the bias is bearish, as indicated by the downward pointing triangle.
Polka Dot Chart by TradingView
Descending triangle poses challenges for DOT/USD
A descending triangle is a bearish continuation pattern. Therefore, price movements that follow the pattern should continue in the same direction as the main trend has progressed.
The main trend is bearish considering the fact that the DOT/USD has fallen from its 2021 peak above $52 to its current level of $4.7.
The market should move at least a distance equal to the longest part of the triangle to confirm a bearish pattern. Since it points to almost 0, there is no point in calculating it.
I’m not saying that the polkadot will be 0. Before buying a cheap coin, it is better to look at the big picture and look for obvious points on the chart. In this case, the gains in 2023 will be lost and the bulls will be trapped. Adding a descending triangle leaves the bias bearish instead of bullish.
