Polkadot enters price discovery mode as DOT targets $100

Polkadot price has continued to display its leadership as an outperformer in the altcoin market. However, because it has made new all-time highs, it has entered into price discovery mode, which means the highs are unknown until market participants establish them. But buyers should be on the lookout for any weakness or drop in momentum for a steep pullback.

Polkadot price continues to rally and makes new all-time highs

Polkadot price action has pulled back somewhat since reaching a new historical high of $54.25. The whipsaws in price action are readily observed on the Point and Figure chart below. One positive outcome of the indecision in the short-term price swings is developing one of two bullish patterns in Point and Figure: the Bear Trap or the Bearish Fakeout.

Currently, Polkadot price is already positioned to confirm a Bear Trap pattern. This will occur if a new column of X's forms and hits the entry. The hypothetical long trade is a buy stop at $53.00, a stop loss at $52.00 and a profit target at $60.00. However, if one more O forms in the current column of Os and the news X column hits the entry, that would confirm the Bearish Fakeout pattern.

DOT/USDT $0.25/3-box Reversal Point and Figure Chart

The theoretical long trade setup will be invalidated if Polkadot price drops to $50.50. If that occurs, the subsequent support level buyers will be looking at is the 38.2% Fibonacci retracement at $49 or the 50% Fibonacci retracement at $47.50.