Polkadot price bearish reversal puts bullish forecast on hold

Over the last three days, Polkadot price has pulled back to the lower trendline of the symmetrical triangle and the vicinity of the 21-day simple moving average (SMA). Combined, these levels should form notable support in the short-term.

Polkadot price must hold above crucial support

A failure to generate price traction post-breakout from the symmetrical triangle suggests that investors that bought around the all-time high used strength to liquidate losing positions. The weak volume underpinning the selling over the last three days shows that the quantity of interested sellers is minimal at this point.

Since the major rally began on December 28, 2020, Polkadot price has consistently held the 21-day simple moving average (SMA) on pullbacks. In fact, DOT has closed only one day below the important moving average since the rally began, which is a clear demonstration of the hyper conviction in the cryptocurrency.

Yes, the bullish forecast is on hold for now, but a rally above $39.60 will reactivate the uptrend and put the all-time high at $42.20 in the immediate crosshairs. 

Higher profit targets are the 1.382 ($48.30) and 1.618 ($52) extension levels of the symmetrical triangle.

DOT/USD daily chart

Throwbacks in symmetrical triangles occur 37% of the time, reducing the upside potential, but they don’t guarantee a pattern failure. What is essential to watch on the downside is the lower trendline of the triangle and the 21-day simple moving average (SMA). Consecutive daily closes below the outstanding support would be the bearish development to confirm that a different scenario is unfolding.

Downside support first emerges at the February 23 low ($26.60), followed by the .50 retracement level ($23.40) of the 2021 advance.