Polkadot Price Forecast: DOT Retreats Ahead of 30% Rise to $56
- Polkadot hit a snag at $45, resulting in a persistent hiccup.
- Support at the 50 SMA on the four-hour chart could stop the potential downswing toward $28.
- A symmetrical triangle breakout could catapult DOT to $56.
Polkadot exchanges hands at $42 following a 3.3% loss on an hourly basis—more than half of the gains accrued since Tuesday have been wiped due to the minor retreat. The upside has been capped under $45, explaining the overhead pressure.
Polkadot Bulls Strive for Higher Support
The four-hour chart shows that the 50 Simple Moving Average (SMA) is in line to provide immediate support. Holding above this level would ignore the short-term negative sentiments and place DOT back into the breakout trajectory.
However, it is essential to note that Polkadot is dancing within a symmetrical triangle's confines. The chart pattern is molded by converging a couple of trend lines that link sequential peaks and lows.
Typically, the trend lines cross at an approximately equal slope. The formation brings to light consolidation ahead of either a breakout or a breakdown, as illustrated on the chart.
A breakdown occurs from the ascending trendline and pinpoints the beginning of a downtrend. On the other hand, a breakout comes into play at the descending trendline and indicates the start of a bullish trend.
Symmetrical patterns tend to have precise price targets for the breakout or breakdown, mainly measured from the highest point to the pattern's lowest point. Thus, the potentially massive 30% breakdown is highlighted on the chart.
DOT/USD Four-Hour Chart
The same four-hour chart suggests that the ongoing retreat may last longer, especially with the Relative Strength Index (RSI) rejected at the overbought region. As the indicator dives toward the midline, the bearish outlook deepens. Therefore, holding above the 50 SMA might not be a practical move in the near term.
Looking at the Other Side of the Picture
A comprehensive look at the Moving Average Convergence Divergence (MACD) suggests that buyers are in control. The indicator holds above the mean line while the MACD line (blue) sustains the signal line's divergence, hence the possibility of bulls securing higher support.
A rebound from the support at the 50 SMA could pave the way for gains toward the symmetrical triangle's upper trendline. Polkadot will likely swing to $56 if the resistance at this level is shattered.