Polkadot’s native DOT token appears to be rebounding towards USD 100 in the upcoming sessions as it triggers a classic bullish reversal.
Called the “inverted pattern of shoulders, head and shoulders” (IHS), the technical structure occurs when an instrument forms three indentations in a row, namely the middle one called the head, the bottom one and the other two known as the shoulders right and left of almost the same height.
Meanwhile, the level at which all valleys drain represents “division”.
Because of this, It appears that the DOT has formed an IHS pattern since its price correction from the price range of $ 43 to $ 49 (excerpt), as shown in the graph below. On November 1st, the Polkadot token broke the range and continued its rally the following day to bring its monthly return to date to nearly 25%, while hitting its all-time high of $ 53.35.
The jump in price was accompanied by an increase in trading volume, showing that traders supported the move beyond the neck of the IHS pattern. As a result, he isThe prospects for DOT of increasing its IHS maximum head-to-neck clearance (approximately $ 39) improved.
As a result, the DOT profit target outside of its IHS setup is approaching $ 90, with the potential for rallies expanding to $ 100, a level of psychological resistance.
FOMO of the Parachains auction
The DOT’s most recent price rally came as dealers’ focus shifted to their much-anticipated Parachain auctions on or about November 11th.
Polkadot’s team announced on November 1 that its council had approved the motion allowing parachain registration and group loaning from November 4th, adding that the proposal now needs to be approved by referendum.
The motion to allow parachains and crowdloans to be registered has accepted Polkadot’s advice and resulted in a public referendum. If successful, Parachain teams can register their Parachain and their crowdloan on November 4, 2021 at around 7:15 p.m. CET. https://t.co/5ouDWBmnvc
to???? Polkadot (@polkadot) November 1, 2021
The motion to allow parachains and bulk loan registration was approved by the Polkadot Council and submitted to a public referendum. If approved, Parachain teams can register their Parachain and collect their collective loan on November 4, 2021 at around 7:15 p.m. CET.
Group loans allow competing projects to raise funds through the DOT to initiate their Paracahain auctions.
Those who support the projects lock their DOT on a sponsored account for a predefined period of time. In return, You will receive rewards in the form of tokens launched through a project airdrop that competes for space on the Parachain.
In June, Polkadot’s testnet chain, named Kusama, ran a similar auction of rooms in Parachains. The protocol eventually demonstrated the effectiveness of the collective loan mechanism as users contributed more than 1.11 million KSM to the five Parachain auctions.
That corresponded to more than 10% of the total blocked offer from KSM.
KSM’s price rallied in the days leading up to the June auction. It peaked at around $ 645 on May 16 and then fell more than 78% to $ 138.50 two months later. The sell-off also came amid a general decline in the cryptocurrency market, led by China’s outright ban on cryptocurrency activities.
So it appears that the DOT has also seen a price rally called “buy the rumor” as traders bet higher on the Parachains auction event. But in the absence of a China-like event, the cryptocurrency appears to be following the IHS pattern setup mentioned above.
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