Has the Polkadot Price just completed a textbook break and retest pattern? If so, DOT could be heading back to $30.00.
After jumping 25% in three days, Polkadot (DOT) failed to clear trend resistance at $40.00 on Tuesday, and a result has pulled back around 7% on Wednesday. The DOT token is currently changing hands at $38.01, around 32% below November’s all-time high but 250% above the July lows. DOT’s current market cap is approximately $37.6 billion, placing it 9th in the crypto league table, ahead of Dogecoin and Avalanche.
After hitting a record $3 trillion valuation at the start of last month, volatility returned to the cryptocurrency market. Whilst Metaverse and gaming-related projects continued higher, Bitcoin slumped to a 7-week low over the weekend. However, capital has rotated back into BTC in the last couple of days, helping Polkadot post four consecutive days of gains. But despite the bounce, DOT’s short-term prospects are unclear, which may encourage profit-taking.
The daily chart shows the Polkadot price broke down from its uptrend during Friday’s meltdown. Furthermore, the former trend support at $40.30 (now resistance) rejected yesterday’s rally, undoubtedly a bearish sign. On that basis, as long the price remains below trend resistance, the immediate outlook is negative.
Below the market, the 100-Day Moving Average at $37.39 does offer support. However, in my opinion, the trend remains the dominant theme, and therefore, I maintain a bearish view, targeting the 200-DMA at $28.66.
As mentioned, the uptrend is the key to DOT’s immediate future, and a close above $40.30 invalidates the pessimistic call.
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This post was last modified on Dec 01, 2021, 05:13 GMT 05:13