Polkadot Price Analysis: DOT Price Cracks Critical Hurdle at $40, Setting the Pace and Eyeing $50

Last Updated July 23rd 2021
2 Min Read
  • Polkadot keeps nurturing an uptrend toward the coveted $50.
  • Establishing higher and robust support will keep bearish advances at bay.
  • Polkadot bulls took control of the price immediately after the slump to $35 on Wednesday. Before the losses brought about by instability in the entire cryptocurrency market, DOT fought to overcome the barrier at $40. Nonetheless, it was an uphill battle that only left buyers exhausted. The drop to $35 allowed more investors to come in, bolstering the token past $40.

    In the meantime, Polkadot exchanges hands at $41 amid a bullish building momentum. If technicals improve in the coming sessions, DOT will close the gap to $44 (the all-time high), which will open the door for gains targeting $50.

    Polkadot embraces short-term technical outlook

    The confirmed break above $40 has left investors yearning for more action toward $50. Meanwhile, the chart outlook in the four-hour timeframe is mainly bullish, reinforced by the Relative Strength Index (RSI).

    This indicator tracks the trend of an asset and measures its strength, as the name suggests. The RSI helps to identify oversold and overbought conditions as well. For instance, the recent drop to $35 took Polkadot to near oversold conditions, which explains the reversal. As the RSI heads toward the overbought, buyers are encouraged to increase their stakes, in turn adding weight to the ongoing uptrend.

    DOT/USD 4-hour chart

     dot/usd 4-hour chart 051421

    The Moving Average Convergence Divergence (MACD) in the same four-hour chart is a technical indicator designed to explore the relationship between different exponential moving averages (EMAs), primarily the 12-day and the 26-day. The indicator shows the MACD line, a signal line, and a histogram (clearly displays the difference between the MACD line and the signal line).

    Note that MACD lines oscillate around a mean line (0.00), giving the impression of oversold or overbought market conditions. In other words, this indicator measures the momentum or the strength of a trend. The MACD line will cross above the mean line during an uptrend, while in a downtrend, it will cross below.

    Consequently, as the 12-day exponential moving average crossed above the 26-day exponential moving average, the odds for a bullish impulse increased significantly. Therefore, Polkadot is most likely to push the uptrend higher, perhaps settle above $44 before continuing to $50.

    If the resistance at $44 remains intact, the uptrend will either delay or be abandoned. On the downside, pressure onto the support at $40 and the 50 SMA will rise appreciably. The downtrend could also resume, sending Polkadot to $35 and $30, respectively.

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