The weekend’s downtrend has left many investors and traders on edge. However, an in-depth analysis by More Crypto Online YT channel provides some intriguing insights into the potential future of two key players in the market: Stellar (XLM) and Polkadot (DOT).
Stellar (XLM) is currently tracking a potential C wave from the June low of around $0.075. The expectation is for a five-wave move to the upside. However, this is against the higher-level trend, which makes the wave count less confident.
The bullish path would require a fourth wave and a fifth wave that can form a large wave one, followed by a pullback in Wave 2. This could potentially lead to a third-wave rally to new highs. However, this scenario is contingent on the $0.135 level holding. If this level breaks, the bullish outcome becomes less likely.
The idea is that there was a small A wave, followed by a B wave, and the C wave of wave B is currently unfolding. A B wave always consists of three waves, and then the C wave is expected to be a five-wave move.
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This could potentially be a wave one, followed by a wave two, and currently, it might be in a third wave. Subsequently, there should still be a fourth and a fifth wave. This is how the situation could be tracked on a micro level.
The short-term trend for XLM is upward, but the long-term chart presents some risks. The current setup suggests a B wave pullback, which is expected to lead to a C wave rally as long as the $0.1345 level holds. This level is crucial, and a sustained break below it would drastically reduce the likelihood of a further move to the upside.
Polkadot (DOT): Key Support Levels Amid Market Volatility
On the other hand, Polkadot (DOT) is showing signs of a potential Elliott wave triangle in its B wave. This five-wave move, characterized by higher lows and lower highs, suggests a break to the downside. This break has been witnessed just before the FED interest rate decision, aligning with the wave count.
The move ideally wraps up the entire wave 2 correction. However, it’s important to note that this is not confirmed to be a bullish pattern yet. It needs to prove itself by showing five waves up and a three-wave pullback into support.
The key support level to watch is the 78.6 Fibonacci retracement at $4.50. If this level holds, we could potentially see a third-wave rally. However, if it breaks, we could see a breakdown to potentially new lows.
The area between $4.91 (the 50% retracement) and $4.50 (the 78.6% retracement), with the golden ratio (the 61.8% retracement) at $4.74 in between, is key support. Then, we should be able to rally in a third wave, but again, it needs to hold that $4.50 level. That’s the pivot point between a third-wave rally and a breakdown to potentially new lows.
In conclusion, the cryptocurrency market is in a state of flux, with both Stellar and Polkadot showing potential for future growth despite the current downtrend. However, these predictions are contingent on key support levels holding. As always, it’s crucial for investors and traders to keep a close eye on these levels and adjust their strategies accordingly.
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