The cryptocurrency Polkadot (DOT) has rejected the November-December basing efforts with the mid-December breakdown and now threatens a further bearish extension through year-end into January 2023.
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Polkadot Bearish Extension into Late 2022
Polkadot is a blockchain designed to support other blockchains, allowing blockchains that are not connected to transfer data securely and communicate. The Polkadot platform is an eco-friendly cryptocurrency network, composed of other blockchain systems.
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The Polkadot site states, “Polkadot is built to connect private and consortium chains, public and permissionless networks, oracles, and future technologies that are yet to be created. Polkadot facilitates an internet where independent blockchains can exchange information and transactions in a trustless way via the Polkadot relay chain”
In early December we highlighted the basing effort by the cryptocurrency, Polkadot, but this bottoming effort has been rejected by the mid-December plunge lower and by further losses going into year-end. The mid-month bear gap lower through the latter November bear cycle low at 4.99 destroyed the potential for a base, also pushing through wedge support (see below) and has encouraged a more significant bearish extension.
Downside Threats
With Polkadot now pushing through the bottom of a falling wedge pattern, the threat through the end of 2022 and into the first quarter of 2023 is for a more bearish projection. We see downside threats for bearish Fibonacci extension targets at 4.03/00 and 3.65 into January. Below here opens risk to 3.14 and even 2.77 into Q1 2023.
Upside Recovery Challenges
The more bearish theme would only be eased by a recovery above the bottom of the mid-December bearish gap at 4.72 to then target a gap closure through 4.93. Above here then opens risk towards impulse/ swing resistances clustered at 5.25/36. Only above here significantly eases the short- intermediate-term bearish threats, highlighted above.
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