DOT's next move hinges on BTC's performance

TLDR

• DOT's technical analysis reveals a potential breakout from a major downtrend, surpassing a key resistance at $4.22.
• While encountering resistance around $4.40-$4.50, the RSI indicates room for further growth.
• Positive funding rates signal a shift in market sentiment towards longing smaller cap coins.
• However, caution is advised, as DOT's fate remains intertwined with Bitcoin's performance.

Disclaimer: Not financial or investment advice. You are responsible for any capital-related decisions you make, and only you are accountable for the results. “One Glance” by Cryptonary sometimes uses the RR trading tool to help you quickly understand our analysis. They are not signals, and they are not financial advice.

Technical analysis

DOT is attempting to break out of its major downtrend line, and so far, DOT has done well to climb above its horizontal resistance of $4.22. 

However, sellers have begun showing up in the $4.40s to $4.50s area, in line with sellers showing up for BTC at its resistance area of $34,500. 

If DOT can hold above $4.22, and BTC can avoid a more meaningful pullback, then DOT could push onto the $4.60s in the near term. 

RSI and funding rates

The RSI is good. It is at 65, so close to overbought but nowhere near over-extended. If BTC can hold up, DOT is set up well to move higher.

The funding rate is very positive for the first time in a long time. This shows a shift in market sentiment from shorting these smaller cap coins to now wanting to long them. Despite this, we feel DOT can move higher, although this depends on BTC holding up. 

Cryptonary’s take

As far as trading altcoins go, we like DOT’s setup. The risk is if BTC breaks down, it will likely drag altcoins lower. But, if BTC holds up, then DOT will go higher in the near term. 

Action

• We’re not trading this as we’re hesitant around BTC and what impact that might have on the general market if it does pullback further.