polkadot analysis

Polkadot could be gearing up for a sustained rebound toward new all-time highs, depending on DOT’s ability to hold above a crucial support barrier.

Polkadot Holds at Crucial Support

Polkadot looks ready for another rally despite the 25% correction it suffered shortly after hitting a record high at $55.20 on Nov. 4.

As excitement surrounding last week’s para chain auction launch intensifies, the number eight cryptocurrency by market cap has reached a crucial support level represented by the lower boundary of a parallel channel, which developed on the 12-hour chart since early July.

polkadot analysis
Source: TradingView

Every time DOT has dropped to this technical pattern’s lower trendline, it has rebounded, surging to the pattern’s middle or upper edge. From this point, it tends to get rejected, which is consistent with the characteristics of a parallel channel. Similar price action suggests that the channel’s lower trendline will continue to hold and serve as a rebound point for Polkadot.

Therefore, a spike in buying pressure around the current price levels could push DOT toward the channel’s middle or upper trendline. These resistance points are set at $60.60 and $89.35 respectively.

The Tom DeMark (TD) Sequential indicator adds credence to the optimistic outlook. It presented a buy signal in the form of a red nine candlestick on Polkadot’s 12-hour chart. The bullish formation anticipates a one to four candlestick upswing or the beginning of a new uptrend. As long as DOT holds above $41.40, the bullish thesis should remain valid.

However, if it fails to hold, traders may be encouraged to exit their long positions in anticipation of a steep retracement. The increase in selling pressure could then ignite a correction toward $34.80 or even $30.10.

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