Polkadot (DOT) price broke the long and short term resistance levels. However, the reversal of its bullish trend is yet to be confirmed.
Polkadot price has fallen below a descending resistance line since its all-time high of $55.10 in November 2021. This decline resulted in a December 2022 minimum of $4.22. The descending resistance line remained intact throughout this downtrend.
However, Polkadot price started 2023 with an upward move, breaking above the resistance line. At the time of the breakout, the line had been in place for 427 days. Breaks of such long-term formations often result in significant upward momentum and signal that a previous downtrend has come to an end.
However, to confirm its bullish reversal, DOT price needs to retest the $6.80 resistance area. This area is important as it has acted as both resistance and support since earlier in 2020.
If Polkadot Price Successfully Breaks Out, It Could Surge The next resistance lies at $9.30. If it gets rejected, it could instead drop towards the $4 support area.
Similar to the price action, the weekly RSI is turning bullish but does not confirm a bullish reversal. This is because it has broken above its bearish divergence trend line (black) but has not moved above 50.
Polkadot Price Prediction for January Is Bullish
Technical analysis from the daily time frame shows the reason for the ongoing Polkadot price increase. In late December 2022, the daily RSI generated a bullish divergence (green line) before breaking out from a bearish trend line. Then, it went above 50. All three are considered bullish signals.
On January 14, DOT token price broke out of a descending wedge pattern, confirming bullish Polkadot price analysis. While it reached a high of $6.52, Polkadot price was rejected by the 0.382 Fibonacci retracement resistance level and formed a long upper wick (red icon).
Currently, DOT coin price is trading in the $5.60 horizontal zone, trying to verify it as a support.
If it succeeds in doing so, then an upward movement (green) towards the $7 resistance area is most likely the Polkadot price prediction for January. If the price breaks down, it will likely move back to the resistance line of the $4.50 wedge.
The bullish Polkadot price prediction for January is more probable due to bullish readings from the weekly time frame.
To conclude, the most likely DOT price prediction for January is an increase towards the $7 area and a possible breakout. On the other hand, a daily close below $5.60 suggests further downside is expected towards the previous resistance of $4.50.
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