Polkadot price structure unchanged as DOT awaits breakout to $40
|- Polkadot price action is mostly unchanged; the same reversal column still exists from November 3, 2021.
- Bulls have been awaiting an entry for months, but the wait continues.
- Point and Figure charting filters out the noise and prevents a lot of the anxiety associated with Japanese candlestick charts.
Polkadot price action has been hammered lower along with the rest of the cryptocurrency and broader risk-on markets. As a result, bears could push DOT to the $14 value area, a price zone not seen since August 2021.
Polkadot price action continues to display a bullish reversal pattern
Polkadot price continues to have one of the longest-lasting Spike Patters on its Point and Figure chart of the entire cryptocurrency market. The beginning of the current O-column was first developed on November 3, 2021. Since then, DOT has yet to have a reversal column of Xs develop. Although no time factor exists on a Point and Figure chart, the length of time without a reversal is notable and considerable.
A Spike Pattern is any column with fifteen or more Xs or Os. It represents extremes and overdone movements. The entry off of a Spike Pattern is the three-box reversal. Compared to other patterns in Point and Figure analysis, the Spike Pattern requires active management and is a more aggressive entry.
The theoretical long entry opportunity identified last week, moved one box lower. The buy stop order is now at $24, a stop loss at $16, and a profit target at $100. The profit target is derived from the Vertical Profit Target Method in Point and Figure analysis and should not be viewed as a target likely to hit anytime soon.
Given the resistance levels that have been discussed in prior analysis and on the existing Ichimoku charts, the $35 to $40 value area is likely to stop Polkadot’s initial rally from the entry.
DOT/USDT $2.00/3-box Reversal Point and Figure Chart
Additionally, because it is a Spike Pattern, the low of the current O-column is not known. Therefore, if Polkadot price moves lower, the entry and four-box stop loss move in tandem.
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