Traders generally use technical analysis to analyze any asset’s price trend using past market data in an attempt to predict future price movement. This analysis mostly involves studying price and volume over different types of charts like candlestick charts, line charts, heikin ashi charts, etc.
For crypto assets like Polkadot, DOT price analysis includes the study of patterns with a mix of indicators like moving averages, RSI, MACD, Fibonacci retracements, etc. In this article, we will study more about the Polkadot technical analysis and offer a deep insight into the upcoming price movements.
Key Technical Indicators for Polkadot
A complete technical analysis for Polkadot uses technical indicators to support the price action analysis.
The key technical indicators include:
The moving averages are a crucial dynamic averages line that helps identify crucial support and resistance areas. The two critical moving averages are 50-day and 200-day. A bullish crossover, in which the 50-day MA crosses from below to above the 200-day MA, gives a BY signal, and vice-versa.
The Relative Strength Index is an oscillator that helps identify the situation in which an asset is in oversold or overbought conditions. The RSI value below 30% is considered oversold, and above 70% is overbought. Currently, it is neutral at 53.51%
Moving Average Convergence and Divergence (MACD): MACD measures the momentum of Polkadot’s price movements and provides crossover signals similar to moving averages. Currently, it is giving a BUY signal.
Identifying Chart Patterns in Polkadot’s Price
Amid the volatile crypto market, the increased Polkadot price volatility maintains a bearish trend.
The volatile price action reveals multiple crypto chart patterns.
- Falling Wedge: The bearish trend forms a larger falling wedge pattern. Further, the recovery rally challenges the overhead resistance redline of the falling wedge pattern.
- Inverted Head and Shoulder Pattern: With the possibility of a bullish reversal, the DOT price action teases an inverted head-and-shoulder pattern with a neckline at $4.995.
- Double Top Reversal: The DOT price action reveals multiple double top reversals within the falling wedge.
With the help of Polkadot technical patterns, crypto traders can identify buying or spelling spots along with the target and stop loss areas.
Future Price Predictions Based on Technical Analysis
Polkadot price analysis teases a falling wedge breakout using the current technical indicators and chart patterns. The breakout rally will likely complete the inverted head-and-shoulder pattern by reaching the $5 psychological mark. Supporting the breakout chances, the MACD and signal line give a bullish crossover.
For the longer term, the Polkadot price prediction depends on the broader market recovery. With the inverted head-and-shoulder breakout rally, the DOT price forecast targets $9.17 or 78.60% Fibonacci level as a potential target by the end of 2024.
External Factors That Could Impact Polkadot’s Price
Along with the technical analysis, the crypto market has been known to react sharply to external factors. These external factors generally include any significant change in the regulatory space, a shift in the global market sentiment, etc.
Regulatory changes: Crypto regulations shift amid the U.S. presidential elections can significantly impact the Polkadot price trend.
Geopolitics: With the increasing tensions between Israel and its neighboring countries, East Asia is under extreme turmoil. If the situation escalates, it will directly impact the DOT market sentiment and could result in a crash.
Conclusion: Final Thoughts on Polkadot’s Price Trends
In conclusion, the Polkadot technical analysis suggests a high possibility of a bullish trend ahead. With a bullish pattern and a buy signal from technical indicators, the breakout event will offer an entry opportunity for crypto traders. As for the DOT coin price forecast, the breakout run in Polkadot can surpass the $9 mark if it finds the support of broader market recovery.
