Polkadot (DOT) price is trading inside a short term bullish pattern, but is yet to show any bullish reversal signals.
Since reaching an all-time high of $55.09 in November 2021, Polkadot price declined below a descending resistance line. The downward movement reached a low of $5 last month. While DOT price subsequently rebounded, validating the $5.40 area as support, it failed to initiate a significant upward movement.
The weekly RSI is bullish as it has generated a significant amount of bullish divergence (green line). However, the price action is yet to confirm the reversal.
If DOT price sustains a weekly close below the $5.40 area, it will likely decline towards the next support at $3.90.
Conversely, a breakout from the long-term resistance line would confirm a reversal of the bullish trend.
Polkadot price nears end of bullish pattern
A look at the daily time frame reveals that the price of DOT has been trading within an ascending wedge since May 13. The descending wedge is considered a bullish pattern, which means a breakout is expected from it.
On November 22, DOT bounced off the support line of the wedge (green icon), but has not yet started an upward movement.
Unlike the weekly RSI, the daily RSI is bearish as it has not generated any bullish divergence and is below 50.
As a result, the daily time frame approaches the opposite of the weekly. While the price action is bullish, the RSI reading is bearish.
Can Dot Sustain Price Breakout?
Finally, the two-hours chart shows that DOT price broke a short-term descending resistance line. It is now in the process of validating it as supported (green icon).
As a result, if the breakout sustains and Polkadot price starts its upward move, it could move towards the long-term wedge resistance line at $6.
Conversely, failing to do so would likely result in the same wedge falling towards the support line.
Afterwards, the direction of the longer-term trend will be determined by whether DOT price breaks out of the long-term resistance line or closes below $5.40.
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disclaimer
BeinCrypto endeavors to provide accurate and up-to-date information, but shall not be responsible for any missing facts or incorrect information. You comply and understand that you should use any of this information at your own risk. Cryptocurrencies are highly volatile financial assets, so do your research and make your own financial decisions.