Polkadot Price Analysis: DOT Stuck Between A Rock And A Hard Place, Where To Next?
- Polkadot's recovery toward $20 may fail to see the light of day after running into immense resistance at the 100 SMA.
- The 50 SMA provides the bulls with the much-needed support; if shattered, a correction will ensue.
- A falling wedge pattern breakout impact could see DOT sustain the uptrend in the near term.
Polkadot began the week in the green as the entire market recovered from the losses incurred last week. The bulls intend to end the week at a higher price level. However, an emerging resistance could cut short their goal.
Polkadot Treads On Shaky Ground
The smart contract token has lifted to trade near $15 at the time of writing. Its immediate upside has been capped under the 100 Simple Moving Average (SMA) on the 12-hours chart. A break above this moving average barrier could enhance the uptrend toward $20.
However, there is a possibility the bullish force will be surmounted, preventing the upswing from materializing. Support has been provided to Polkadot by the 50 SMA in the same four-hour timeframe. A daily close below this level could trigger a correction, with bears targeting $10.
DOT/USD 12-hour chart
The TD Sequential indicator affirms the bearish outlook by presenting a sell signal on the daily chart. This call to sell manifested in a green nine candlestick, suggesting that the uptrend will start to fade as bears gain traction gradually. If confirmed, Polkadot price will drop in one to four daily candlesticks, perhaps explore levels under $10.
At the same time, DOT's immediate upside is capped at the 50-day SMA. For several times bulls have tried to pierce through this formidable resistance without success. Hence, another rejection is anticipated, either delaying the uptrend or delaying it altogether.
DOT/USD daily chart
Looking At Polkadot Price Bullish Perspective
The 12-hour chart illustrates the formation of a falling wedge pattern. This pattern is highly bullish and often gives way to a significant uptick in price. The falling wedge occurs after a massive move in an asset followed a downtrend. A couple of trend lines connect the declining peaks and lows.
Usually, the pattern begins to form with a high volume, diminishing as the trend lines narrow. A breakout above the upper trend line confirms the falling wedge. A spike in volume accompanies the breakout, leading to a significant upswing. Hence, Polkadot could sustain the uptrend toward the coveted $20 on account of the described breakout.
The Moving Average Convergence Divergence (MACD) also validates the potential uptrend with the latest progress above the mean line. A recent buy signal has also been sustained on the 12-hour chart.