Polkadot Price Prediction: One more pump then dump at best

Polkadot price coils in what appears to be a triangle consolidation.
DOT price hovers above an ascending trendline under relatively low volume.
A breach of the $6 barrier could send DOT 40% lower into the $4.25 zone.

Polkadot price could bounce near this level, but the technicals suggest a larger selloff is coming.

Polkadot price is on thin ice

Polkadot price shows reasons to be concerned as the bears are hours away from printing a classical shooting star reversal pattern on a 3-day chart. The last time the classic reversal pattern formed was a month ago, on August 14, near the $9 barrier. DOT price declined by 15% three days later as the bears wasted no time validating the reversal pattern’s power.

Polkadot price currently auctions at $6.73, about 23% lower than the first morning star pattern in August. The bulls have to stair-stepped into supportive territory on the Relative Strength Index, while the volume profile remains less than the previous bull run's reading in July.

DOT USDT

A Fibonacci retracement tool surrounding the summer time high at $9.678 and September low at $6.78 shows the shooting star pattern occurring near the 50% and 38.2% levels. If the technicals are truly bearish, the bears should be able to breach the supportive trend line that currently supports the Polkadot price.

If the bears do not establish the breach soon, one more wave up could occur towards the 61.8% retracement level at $8.45. Such a move would be a 20% increase from the current market value.-

However, traders should remember that one last wave up could finalize wave E of the much larger triangle formation at play. If the technicals are correct, the triangle could catalyze a much larger decline targeting $4.25 as early as Q1 2023.

In the following video, our analysts deep dive into the price action of Polkadot, analyzing key levels of interest in the market. -FXStreet Team

Share: Cryptos feed

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.