Polkadot (DOT) price has been trading above the long-term horizontal support area for 1,100 days, currently at $4.30. Whether the price will bounce in this region and start an upward movement or break it will help determine the direction of the future trend.
Critical Zone for DOT Price!
The technical analysis for the weekly timeframe shows that the DOT price is trading above the $4.30 horizontal support area. This level is critical as it has been present for 1,100 days. Due to the length of time that the area has provided support, it is crucial for the price to stay above this level to sustain the upward trend.
If the DOT price bounces, the next resistance level could be $7.70, which is currently 74% above the current price. On the other hand, a potential breakdown could lead to a 53% drop to the next closest support at $2, which corresponds to the all-time low levels. The weekly RSI presents an uncertain reading. Investors use RSI as a momentum indicator to identify overbought or oversold scenarios and assist in making decisions to accumulate or sell an asset.
Trends for DOT Data
Readings above 50 indicate a bullish dominance, while readings below 50 indicate the opposite. Despite the indicator being below 50, it exhibited a bullish trend. This scenario may involve increasing momentum and a price decline that typically leads to an upward movement. Considering these conflicting signals, the RSI on the weekly timeframe may not confirm the current Polkadot trend.
According to experts, unlike the weekly timeframe, the daily timeframe presents a bearish outlook. The main reason for this is that the price has been trading within a descending triangle since the beginning of the year. A descending triangle is considered a formation that indicates a downward trend, which often leads to breakouts. Despite the bearish price prediction for DOT, a breakout from the resistance line of the triangle could mean that the trend is still bullish, and an increase to the $7.70 resistance level could be possible.
