beincrypto.com
The Polkadot (DOT) price has increased for four consecutive weeks, culminating with a high of $5.90 this week.
The upward movement caused a breakout from a descending resistance trend line and reclaimed two horizontal resistance areas.
Polkadot (DOT) Continues Ascent
In the analysis of DOT’s weekly time frame, it is observed that the price experienced a decline below a descending resistance trend line starting from February, reaching a low point of $3.56 in October.
This downward movement resulted in a breach of the crucial $4.40 horizontal support area, which had previously served as a support level since the beginning of the year.
Nevertheless, there has been an upward movement in the DOT price over the past four weeks. The Polkadot price broke out from a descending resistance trend line in October and reached a high of $5.90 this week, the highest price in 200 days. The high reclaimed the $4.40 and $5.50 horizontal areas.
Read More: What Is Polkadot (DOT)?
Traders commonly employ the Relative Strength Index (RSI) as a momentum indicator to evaluate market conditions, determining whether an asset is overbought or oversold and deciding when to buy or sell.
A reading above 50 on the RSI, coupled with an upward trend, signals an advantage for the bulls. Conversely, a reading below 50 indicates the opposite.
Presently, the RSI is on the rise and stands above 50.
Polkadot’s decentralized exchange (DEX) Polkadex announced it was partnering with TradingView to give Polkadex users seamless access to price charting and technical analysis tools. This allows them to have a centralized exchange (CEX)-like trading in a DEX.
What Are Analysts Saying?
Cryptocurrency traders on X (formerly Twitter) are predominantly bullish.
DavidOnCrypto believes that the price will reach double digits soon. He stated that:
“Breakout done
“Retest happening
“Full Send Continuation soon?”
Rektcapital has shown a similar breakout from a descending resistance trend line, but his main resistance is at $8.
Nebraskangooner says that the price will keep pushing upward but has not given a target for the future movement.
DOT Price Prediction: Can Price Reach Double Digits?
Technical analysts apply the Elliott Wave theory to identify recurring long-term price patterns and understand investor psychology, aiding in trend direction determination.
The prevailing Elliott wave count suggests that the Polkadot price completed a five-wave downward movement (white) since its all-time high in November.
If accurate, this signals the initiation of a new movement in the opposite direction. Whether this marks the onset of a bullish trend reversal or an upward correction remains uncertain, but both scenarios anticipate a significant DOT price increase.
Read More: How To Stake Polkadot (DOT)
The bullish divergence in the weekly RSI since the start of the year further supports the ongoing upward momentum. Such divergence typically manifests at trend bottoms, preceding bullish trend reversals.
The significance of this bullish divergence is heightened by its alignment with the reclamation of the $4.40 area and the conclusion of a five-wave downward movement.
Should the altcoin’s increase continue, the next resistance is projected at $10, representing a 90% increase from the current price.
Despite this bullish forecast for DOT’s price, a weekly close below the $5.50 horizontal area can trigger a sharp fall, initiating a 20% DOT price decrease to the $4.40 horizontal support area.
Read More:9 Best AI Crypto Trading Bots to Maximize Your Profits
For BeInCrypto’s latest crypto market analysis, click here.