Polkadot (DOT) Price Analysis: Four Consecutive Weeks of Gains Pushes Toward Double Digits
Crypto News – Polkadot (DOT) has witnessed an impressive four-week rally, culminating in a recent high of $5.90 per token. This surge has not only broken through a descending resistance trend line but also reclaimed two crucial horizontal resistance levels.
Polkadot’s Ascending Trajectory
Examining DOT’s weekly timeframe, we can trace a descent that began in February, causing the price to plummet to a low of $3.56 by October. During this downward spiral, the critical horizontal support at $4.40, which had served as a strong foundation since the year’s outset, was breached.
However, over the past four weeks, DOT has embarked on an upward trajectory. In October, the price broke free from the descending resistance trend line, reaching its highest point in 200 days at $5.90. Notably, this ascent also successfully reclaimed the $4.40 and $5.50 horizontal areas.
Analyzing Market Momentum
Traders often rely on the Relative Strength Index (RSI) as a key momentum indicator to assess market conditions, identify overbought or oversold assets, and make informed trading decisions. An RSI reading above 50, combined with an upward trend, signals a bullish advantage, while a reading below 50 indicates the opposite.
Currently, the RSI is on the rise and stands above the 50 threshold, indicating favorable conditions for the bulls.
Polkadot’s DEX Partners with TradingView
In an exciting development, Polkadot’s decentralized exchange (DEX), Polkadex, has announced a strategic partnership with TradingView. This collaboration provides Polkadex users with seamless access to price charting tools and advanced technical analysis capabilities, offering a decentralized exchange experience reminiscent of centralized exchanges (CEX).
Cryptocurrency traders on various platforms, particularly Twitter (now X), are largely bullish on Polkadot’s prospects.
- DavidOnCrypto is optimistic, believing that DOT’s price is poised to reach double digits soon. He confidently stated, “Breakout done, retest happening, Full Send Continuation soon?”
- Rektcapital also acknowledges the breakout from the descending resistance trend line but places the main resistance at $8.
- Nebraskangooner anticipates continued upward momentum in price but has not provided a specific price target.
DOT Price Prediction: Heading Towards Double Digits?
Technical analysts often employ the Elliott Wave theory to identify recurring long-term price patterns and gain insights into investor psychology, aiding in predicting trend directions.
The prevailing Elliott wave count indicates that Polkadot’s price has completed a five-wave downward movement (white) since reaching an all-time high in November. If this analysis holds true, it could signify the initiation of a new upward movement. Whether this signals a bullish trend reversal or an upward correction remains uncertain, but both scenarios suggest a significant potential increase in the DOT price.
Furthermore, the bullish divergence observed in the weekly RSI since the beginning of the year further bolsters the ongoing upward momentum. Such divergences typically materialize at trend bottoms, often preceding bullish trend reversals.
The significance of this bullish divergence is heightened by its alignment with the reclamation of the $4.40 support area and the conclusion of the five-wave downward movement.
Should the upward momentum in this altcoin persist, the next significant resistance level is projected at $10, representing a substantial 90% increase from the current price.
However, it’s important to note that despite this optimistic outlook for DOT’s price, a weekly close below the $5.50 horizontal area could trigger a sharp decline, potentially initiating a 20% drop in the DOT price, back to the $4.40 horizontal support zone.