Polkadot’s native DOT token appears poised to rally towards $100 within the coming classes because it triggers a basic bullish reversal setup.
Dubbed “inverse head and shoulders” (IH&S), the technical construction seems when an instrument varieties three troughs in a row, with the center one — known as the pinnacle — being the bottom and the opposite two — often known as the fitting and left shoulders — of virtually equal heights.
In the meantime, the extent at which all of the troughs prime out represents the “neckline.”
So, it seems DOT has been forming an IH&S ever since its value correction from the $43–$49 value vary (neckline), as proven within the chart under. On Nov. 1, the Polkadot token broke above the realm and continued rallying the following day to deliver its month-to-date returns to nearly 25% whereas bumping its report excessive to $53.35.
The value leap accompanied a rise in buying and selling volumes, exhibiting that merchants supported the transfer above the IH&S neckline. In consequence, DOT’s prospects of rising by as a lot as the utmost distance between its IH&S’s head and neckline (round $39) improved.
In consequence, DOT’s revenue goal out of its IH&S setup comes out to be close to $90, with potentialities of prolonged rallies towards $100, a psychological resistance stage.
Parachain public sale FOMO
DOT’s newest value rally got here as merchants’ focus shifted to its extremely anticipated parachain auctions on or round Nov. 11.
The Polkadot group introduced on Nov. 1 that its council handed the movement that allows parachain registrations and crowdloans starting Nov. 4, including that the proposal now awaits a go-ahead through a public referendum.
The movement to allow parachain registration and crowdloans has handed Polkadot’s council and gone to a public referendum. If handed, parachain groups will have the ability to register their parachain and open their crowdloan on Nov. 4, 2021 at approx. 19:15 CET. https://t.co/5ouDWBmnvc
— Polkadot (@Polkadot) November 1, 2021
Those who support the projects lock their DOT into a sponsored account for a predefined period. In return, they receive rewards in the form of air-dropped tokens from the project competing for the parachain slot.
In June, Polkadot’s test-net chain, dubbed Kusama, conducted a similar parachain slot auction. The protocol ended up proving the effectiveness of the crowdloan mechanism, as users contributed more than 1.11 million KSM across the five parachain auctions.
That represented over 10% of the total KSM supply locked.
Related: Kusama network set to launch its next five parachain auctions
KSM’s price rallied in the days leading up to the auction in June. It peaked out on May 16 at around $645 and then dropped over 78% to $138.50 two months later. The sell-off also surfaced amid an overall crypto market decline, led by China’s full-fledged ban on crypto activities.
Hence, it appears DOT has also been undergoing a so-called “buy-the-rumor” price rally as traders bet higher on the parachain auction event. But in the absence of a China-like event, the cryptocurrency looks to be pursuing the IH&S setup mentioned above.
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