- Polkadot price responding positively to the convergence of two tactically important support levels.
- DOT fails to close with a bullish engulfing week, temporarily breaking upside momentum.
- Topside trend line remains the big obstacle for bullish investors in the short term.
Polkadot price is respecting support and could be on pace to close the day with a bullish hammer candlestick pattern. A few hours remain until the close, but it would be an important development in DOT’s quest to overcome the persistent resistance.
Polkadot price tries to challenge constant selling pressure
2021 began strongly for DOT as Polkadot price rallied over 700% into the February high, securing its position as one of the largest cryptocurrencies. However, since the February 20 high at $42.70, the DeFi coin has only rallied another 20% into the May 15 high at $50.74.
Since February, the slight uptrend has created a consolidation range with a stubborn topside trend line and a bearish momentum divergence on the daily Relative Strength Index (RSI), as the index has not printed a new high with DOT price in April or this month.
However, it is important not to overlook the potential of the 12-week consolidation in DOT. The six-week consolidation in MATIC recently yielded a 300% return in just three weeks. In the case of the nine-week consolidation for ADA, it produced a 60% move in less than two weeks.
DOT failed to close last week with a bullish engulfing week on the bar charts, punishing over-eager investors. It would have been a rare and powerful development for the emerging rally off the April low. Instead, Polkadot price closed with a doji candlestick pattern signifying a high level of indecision among buyers and sellers.
Today, Polkadot price is wrestling with support introduced by the convergence of the declining 50-day simple moving average (SMA) and the daily Ichimoku Cloud. If DOT can keep daily closes around the range of the two tactically important trend indicators, it raises the odds that a test of the topside trend line is near.
Resistance begins at the trend line at $52.10. A successful breakout leaves Polkadot price primed to test the 161.8 Fibonacci extension at $63.63 and the 261.8% extension at $87.00, generating a 67% from the trend line and over 100% gain from price at the time of writing ($39.55).
DOT/USD daily chart
A daily close below the minor trend line at $32.92 would cue a more significant decline through the May 13 low at $31.60 and to the 50% retracement of the 2021 rally at $27.94. Residual selling pressure could push Polkadot price to test the April low at $25.82.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer. Opinions expressed at FXstreet.com are those of the individual authors and do not necessarily represent the opinion of FXstreet.com or its management. Risk Disclosure: Trading foreign exchange on margin carries a high level of risk, and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to invest in foreign exchange you should carefully consider your investment objectives, level of experience, and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading, and seek advice from an independent financial advisor if you have any doubts.
Recommended Content
Editors’ Picks
US presidential election outcome could shape the future of crypto
US citizens will go to the polls to elect a new president on November 5, and their choice could be key for the future of the crypto industry and thus the price outlook for Bitcoin (BTC).
Bitcoin Price Forecast: BTC recovers as Donald Trump takes lead on polls
Bitcoin (BTC) slightly recovered to around $68,800 on Tuesday, following a shift in the United States presidential race that saw former President Donald Trump regain the lead, after US spot Bitcoin ETFs experienced an outflow of over $540 million on Monday.
Crypto markets brace for volatility in tight race between Trump and Harris
The US presidential election is one of the most significant events in the world. Due to the influence of the country’s political decisions, policies, and economic approaches, it can significantly impact crypto and global markets.
Trump-inspired memecoin MAGA shows bullish on-chain metrics ahead of US elections
MAGA (TRUMP) trades slightly down to around $3.4 on Tuesday after rallying more than 20% since Sunday. The former President Donald Trump-based memecoin is poised for further gains as daily active addresses and network growth metrics rise, signaling increased network usage and adoption
Bitcoin: New all-time high at $78,900 looks feasible
Bitcoin price declines over 2% this week, but the bounce from a key technical level on the weekly chart signals chances of hitting a new all-time high in the short term. US spot Bitcoin ETFs posted $596 million in inflows until Thursday despite the increased profit-taking activity.
Best Forex Brokers with Low Spreads
VERIFIED Low spreads are crucial for reducing trading costs. Explore top Forex brokers offering competitive spreads and high leverage. Compare options for EUR/USD, GBP/USD, USD/JPY, and Gold.