How soon can Polkadot break $6? A Look at DOT’s recent market moves

DOT has shown classic signs of a healthy, growth-driven retracement.
However, patience may get tested before a breakout materializes.

As a seasoned crypto investor with a knack for spotting trends and patterns, I find Polkadot [DOT]’s recent behavior intriguing. While it has shown signs of a healthy, growth-driven retracement, I must admit that patience is indeed being tested before a breakout materializes.

Polkadot (DOT) has followed the broader market’s rebound after a four-month downturn, mainly driven by post-election enthusiasm that brought it close to $6. Yet, a three-day decline caused it to dip to $4.75, with its lowest point in a day approaching 7%.

In crypto markets, when prices dip, they can offer a chance for investors to boost the price further by converting previous resistance levels into new support points. Currently trading at $5.64, if DOT has employed this strategy successfully, it might be poised to surpass the $6 barrier, with potential future targets aiming as high as $7.

Consolidation required for DOT to break $6

It’s worth noting that when DOT hit around $6, the Relative Strength Index (RSI) was overbought on the daily chart, indicating a highly active market. This situation made traders worried about a potential correction, causing them to sell off their holdings in anticipation, before any actual correction took place.

Generally speaking, if demand (buying pressure) is not strong enough when exiting a market, it usually results in a reversal or retreat. However, when there’s an equilibrium between buyers and sellers (consolidation), it typically signals a potential surge ahead, often leading to a breakout.

Examining the daily chart of DOT, a pullback reduced the price to around $4.775. Yet, two significantly large green candlesticks emerged in the subsequent days, each marking a new high, indicate that the bulls seized the opportunity by buying DOT tokens at a lower price due to the dip.

Absolutely, bulls seem optimistic about Polkadot’s future, but that alone might not lead to a definite surge. For a surge to occur, bulls need to keep the price above $5, which could result in a period of stability or consolidation.

It’s evident that Polkadot isn’t leading the pack: compared to other cryptocurrencies, it’s lagging behind as many of them are experiencing substantial double-digit increases in a week. This instability means DOT could be prone to significant price fluctuations.

To prevent a sell-off and secure continued growth, it’s essential that supporters hold firm and continue adding to their positions. This consistent buying will help DOT resist a downturn and establish a solid base for future expansion.

$7 might still be too ambitious

Earlier on, we noted that DOT appears to be displaying typical characteristics of a strong, growth-oriented correction. In other words, its price may oscillate or move within a specific boundary in the upcoming period.

This conduct is a tactic used by spot traders to maintain the consolidation of DOT, especially in a volatile market environment.

The possibility of Bitcoin reaching around $7 depends on it surpassing crucial psychological thresholds. However, the repeated red candles pointing down on the following graph suggest an optimistic trend for DOT, potentially leading to a surge towards $6.

Source : Coinglass

Nevertheless, even though outflows amounting to $16.3 million per year hit a peak, the effect on DOT’s price was unexpectedly opposite. Typically, significant outflows suggest strong accumulation, but in this case, DOT experienced a 7% decrease, hinting at possible distribution by large DOT holders.

Therefore, unless this dynamic changes, it may be difficult for DOT to target $7 next.

Read Polkadot [DOT] Price Prediction 2024-2025

As repeated purchases aim to solidify Polkadot’s position and establish $5 as a strong foundation, it’s the substantial hoarding by major investors that could potentially propel DOT towards reaching $6.

This could shift once BTC crosses $93K, providing whales with the right incentive to enter.

2024-11-18 10:15

Consolidation required for DOT to break $6

$7 might still be too ambitious

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