• Polkadot price is in for a massive run-up as two technicals point to a bullish outlook.
  • The recent swing lows combined with the RSI show the formation of hidden bullish divergence, adding a tailwind to the optimistic scenario.
  • The adoption of DOT by FCA registered digital asset custodian Digivault adds credence to the positive outlook.

Polkadot price has been stuck in a consolidation phase for roughly a month. However, this trend might be coming to an end due to three significant reasons. As a result, investors can expect DOT to start a massive bull rally over the coming month.

Technicals point to an inevitable uptrend for DOT

Polkadot price formed the first swing low at $25.21 on September 8 and rallied roughly 53% to create a swing high at $38.76, coinciding with the 70.5% Fibonacci retracement level. 

Since the buyers could not maintain their bullish momentum, DOT retraced to erect the second swing low around the same as the first one at $25.21. The resulting run-up set up a lower high at $33.61 and corrected to form the third swing low a little higher than the previous two at $26.13.

These three swing lows are what is known as a triple-bottom pattern or a triple-tap setup. This technical formation is similar to the double-bottom reversal pattern, which often marks the end of a downtrend and kick-starts a new uptrend.

The second significant reason for this optimism is the green ‘one’ buy signal flashed by the Momentum Reversal Indicator (MRI) on the 12-hour chart.

This technical formation forecasts that the bottom is in and that a one-to-four candlestick upswing is likely.

Therefore, market participants can expect Polkadot price to climb past the recent swing high at $33.61 and make a run at the 70.5% Fibonacci retracement level at $38.30.

If the bid orders continue to pile up, pushing Polkadot price to produce a decisive 12-hour candlestick close above the 79% Fibonacci retracement level at $41.68, it will hint at the uptrend’s continuation.

In this bullish situation, DOT could ascend to the range high at $50.04, constituting a 100% gain.

DOT/USDT 12-hour chart

DOT/USDT 12-hour chart

While the MRI and the triple-tap setup play a pivotal role in forecasting a bullish outlook, the hidden bullish divergence seals the deal.

From August 26 to September 28, Polkadot price formed higher lows, suggesting a potential bullish trend in play. However, at the same time, the Relative Strength Index (RSI) created lower lows.

This forking between the price and the RSI is known as hidden bullish divergence. The result of such a technical formation often results in an uptrend. In DOT’s case, it strengthens the already optimistic narrative that the price is primed for a bull rally.

DOT/USDT 12-hour chart

DOT/USDT 12-hour chart

Fundamentals support the bullish thesis

The last and the most crucial reason this optimism will find its way to push Polkadot price higher is the milestone achieved as a Financial Conduct Authority (FCA)-approved cryptocurrency custodian Digivault announced that it will custody DOT.

Digivault is the first stand-alone cryptocurrency custodian to receive a go-sign from the FCA. Since this custodian is seeing massive interest from retail investors and institutions, the recent development will encourage users to buy and hold DOT. In addition to Polkadot, the company offers custodial services for Bitcoin, Ethereum, USDC, ERC-20 and ERC-1400 products.

CEO of Digivault Rob Cooper added,

While the advanced nature of Polkadot makes the custodial integration more complex than other blockchains, we felt that it was essential to give people the ability to hold such a unique asset within a regulated custodian.

He also stated that their move to acquire a license for Polkadot custody was also a factor of interest from its customers, further adding a tailwind to DOT’s bullish thesis.

 

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.

If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.

FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.

The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.

Cryptos feed

Latest Crypto News


Latest Crypto News & Analysis

Editors’ Picks

Decentraland price under pressure by market turmoil, MANA points to steep correction

Decentraland (MANA) has not been able to sit back and enjoy its all-time highs printed on Thursday, above $6.0. MANA price reversed to the downside as a wave of negative news surrounding a new Covid variant hit news wires during the Asian session.

More Cryptocurrencies News

Bitcoin, Ethereum, XRP at discount ahead of Black Friday while investors fear new COVID strain

Over $265 billion wiped off the overall crypto market capitalization in a bloodbath as news of the new Covid strain breaks out. Bitcoin, Ethereum and Ripple prices have tumbled over 6%, and the top 10 cryptocurrencies are trading at a steep discount.

More Bitcoin News

XRP holds key support while indicators point to short-term recovery

Ripple started a recovery wave above a key support level of $1.024. XRP price started an upside correction as indicators suggest a short-term recovery. The coin may initiate a fresh downtrend upon a breakout of the $1.024 support level.

More Ripple News

Dogecoin-killer Shiba Inu hits 1 million holders, gets listed on South Korean exchange

Shiba Inu hit an important milestone of 1 million holders with a rise in the number of investors. The memecoin listed on a South Korean crypto exchange successfully despite strict regulatory requirements. 

More Shiba Inu News

Black Friday 2021 Discounts!

Do you want to take your trading skills to the next level? Now you have a chance of leaping forward at attractive introductory rates. For Black Friday, FXStreet is offering discounts of up to 50% on its upgraded Premium plans. 

Subscribe now!

BTC

ETH

XRP