Polkadot (DOT) price has remained inside long-term support levels without experiencing significant volatility since the beginning of May.
However, both the price action and the RSI are showing bullish signals suggesting that a bounce is on the way.
Polkadot price above support
Polkadot price has declined since hitting a yearly high of $7.90 on 19 February. The price made a low on April 18 (red icon) before resuming its decline.
On May 12, the price dropped to a low of $5.11 within the key support level of $5.20. It is trading near that level and possibly formed a double-bottom pattern on May 25.
A double bottom is considered a bullish pattern, which means it usually follows an upward movement.
The daily RSI supports the upside potential of the price. By using the RSI as a momentum indicator, traders can determine whether the market is overbought or oversold and decide whether to accumulate or sell an asset.
Bulls profit if the RSI reading is above 50 and the trend is up, but vice versa if the reading is below 50. Even though the indicator is below 50, it is rising. More importantly, the RSI has formed a bullish divergence (green line).
It is a type of phenomenon in which a decrease in price is accompanied by an increase in momentum. This often leads to bullish trend reversals.
DOT Price Prediction: Wave Count Prediction Bounce
Short-term technical analysis on the six-hour time frame suggests that there is a possibility of an upside move. Technical analysts employ Elliott Wave Theory as a means of identifying recurring long-term price patterns and investor psychology, which helps them determine the direction of a trend.
Wave count shows that the decrease since Feb 19 is an ABC corrective structure (white). In this the ratio of waveform A:C is approximately 1:0.786.
If the count is correct, DOT price could slide slightly lower, possibly reaching the 5 Fibonacci retracement support level at $0.786. Then, there would be chances of a significant bounce, which could take the price back to the wave B high of $7.
Despite this bullish DOT price prediction, a decisive close below $5 would mean that the trend is bearish. In that case, the price of DOT would be expected to drop to at least $4.20 and possibly lower.
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disclaimer
In line with Trust Project guidelines, this price analysis article is for informational purposes only and should not be considered financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always do your research and seek professional advice before making any financial decisions.