- DOT forms a double bottom pattern, signaling a potential price rise to $5.
- The $3.90 support area holds key importance for Polkadot’s price direction.
- Bullish divergences in RSI and MACD suggest weakening bearish momentum and potential breakout.
Polkadot (DOT) had a strong start to 2024, reaching a new high of $11.89 in March. Since then, however, the price dropped sharply, almost hitting a new all-time low in August. Recently, though, signs of a potential rebound are emerging. A double bottom pattern is forming, which could push the price back up to $5.
Support Levels Hold Steady
After March’s peak, Polkadot entered a downward spiral, trading inside a descending channel. In August, the price bottomed out at $3.59, finding support near the $3.90 mark. This area has become crucial for Polkadot. If the price dips below $3.90, a new all-time low could be in the cards.
However, a higher low formed in September, offering a glimmer of hope for a recovery. Despite the bounce, technical indicators are still showing bearish signs. The RSI sits below 50, and the MACD remains negative. These factors suggest that the current rally may lack strength.
Double Bottom Pattern Suggests a Bullish Move
Looking at the daily chart, a more optimistic story unfolds. A double bottom pattern is forming around the $3.90 support zone. This is a strong reversal signal, suggesting a potential price increase. The pattern is supported by bullish divergences in the RSI and MACD, which show the bearish momentum weakening.
If this trend continues, the price could rise toward the channel’s resistance line at $5. However, the double bottom offers a short-term outlook. While the pattern indicates a possible rise to $5, the bigger picture depends on whether Polkadot can break out of the descending channel.
A successful breakout could lead to a stronger upward trend. But if the price fails to hold above the support level, another decline may follow. The double bottom pattern in Polkadot’s price action points toward a possible move to $5. A breakout from the long-term descending channel is key to determining whether this rally will continue.
disclaimer read more
Crypto News Land, also abbreviated as "CNL", is an independent media entity - we are not affiliated with any company in the blockchain and cryptocurrency industry. We aim to provide fresh and relevant content that will help build up the crypto space since we believe in its potential to impact the world for the better. All of our news sources are credible and accurate as we know it, although we do not make any warranty as to the validity of their statements as well as their motive behind it. While we make sure to double-check the veracity of information from our sources, we do not make any assurances as to the timeliness and completeness of any information in our website as provided by our sources. Moreover, we disclaim any information on our website as investment or financial advice. We encourage all visitors to do your own research and consult with an expert in the relevant subject before making any investment or trading decision.
