DOT Price (Polkadot) Reaches Key Juncture, Is This Bulls Trap or Correction?

Polkadot (DOT) is correcting gains from the $7.5 resistance against the US Dollar. The price could start another increase if it stays above the $6.75 support.

• DOT gained pace and tested the $7.5 resistance level against the US Dollar.
• The price is trading above the $7.00 zone and the 100 simple moving average (4 hours).
• There is a short-term expanding triangle forming with resistance at $7.50 on the 4-hour chart of the DOT/USD pair (data source from Kraken).
• The pair could continue to decline if it fails to stay above the $6.75 support.

Polkadot Price Holds Support

After forming a base above the $6.00 level, DOT price started a decent increase. It broke many hurdles near $6.75 and even spiked above $7.25. A high was formed at $7.46 and the price is now correcting gains, like Ethereum and Bitcoin.

There was a move below the $7.25 support zone. The price declined below the 23.6% Fib retracement level of the upward move from the $6.03 swing low to the $7.46 high.

DOT is now trading above the $7.00 zone and the 100 simple moving average (4 hours). Immediate resistance is near the $7.25 level. The next major resistance is near $7.50. There is also a short-term expanding triangle forming with resistance at $7.50 on the 4-hour chart of the DOT/USD pair.

Source: DOTUSD on TradingView.com

A successful break above $7.50 could start another strong rally. In the stated case, the price could easily rally toward $8.00 in the near term. The next major resistance is seen near the $8.80 zone.

More Downsides in DOT?

If DOT price fails to start a fresh increase above $7.25, it could continue to move down. The first key support is near the $7.00 level and the 100 simple moving average (4 hours).

The next major support is near the $6.75 level or the 50% Fib retracement level of the upward move from the $6.03 swing low to the $7.46 high, below which the price might decline to $6.50. Any more losses may perhaps open the doors for a move toward the $6.10 support zone or $6.00.

Technical Indicators

4-Hours MACD – The MACD for DOT/USD is now losing momentum in the bearish zone.

4-Hours RSI (Relative Strength Index) – The RSI for DOT/USD is now below the 50 level.

Major Support Levels – $7.00, $6.75 and $6.50.

Major Resistance Levels – $7.25, $7.50, and $8.00.

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

Source