Charted: Polkadot (DOT) Surges 15%, Why Rally Isn’t Over Yet
Polkadot’s DOT started a strong surge after it broke the $5.40 resistance against the US Dollar. It is up over 20% this week, and it even rallied above $7.00.
- DOT gained pace above the $5.40 and $6.00 levels to start a fresh increase against the US dollar.
- The price is now trading well above $7.00 and the 100 simple moving average (4-hours).
- There was a break above a major bearish trend line with resistance near $5.40 on the 4-hours chart of the DOT/USD pair (data source from Kraken).
- The pair traded as high as $7.68 and it is currently correcting lower.
Polkadot’s DOT Rallies Significantly
This week, DOT formed a strong support base above the $5.00 level. It started a steady increase and broke a couple of important hurdles near $5.40 to move into a bullish zone.
It even settled above the $5.50 level and 100 simple moving average (4-hours). More importantly, there was a break above a major bearish trend line with resistance near $5.40 on the 4-hours chart of the DOT/USD pair.
There was a sharp upward move above the $6.00 and $7.00 levels. The price traded to a new monthly high above $7.50 at $7.68, and it outperformed bitcoin and ETH. It is currently correcting lower and trading below $7.50. It already tested the 23.6% Fib retracement level of the recent increase from the $6.25 swing low to $7.68 high.
The first major support on the downside is near the $7.00 zone. It is also close to the 50% Fib retracement level of the recent increase from the $6.25 swing low to $7.68 high.
On the upside, the $7.50 and $7.65 levels are important hurdles. A clear break above the $7.65 level could open the doors for a steady increase in the coming days towards $8.00 or $8.20.
Dips Supported?
If DOT price starts a downside correction below $7.20, it could find a strong buying interest near the $7.00 and $6.95 levels in the near term.
The next major support is near the $6.70 level (a multi-touch zone) and the recent breakout zone. Any more losses might call for a test of the $6.25 support zone.
Technical Indicators
4-Hours MACD – The MACD for DOT/USD is gaining momentum in the bullish zone.
4-Hours RSI (Relative Strength Index) – The RSI for DOT/USD is now well above the 60 level.
Major Support Levels – $7.20, $7.00 and $6.95.
Major Resistance Levels – $7.50, $7.65 and $8.00.
OhNoCrypto
via https://www.ohnocrypto.com
Aayush Jindal, @KhareemSudlow
