Polkadot Price Forecast: A correction or second coming for DOT holders?

Polkadot price rallied nearly 22% last week and set up a local top at $4.45.
DOT is likely to retrace to the $3.98 support level and consolidate here before making its next move.
The resulting bounce is likely going to push the altcoin to the next key hurdle at $4.80.

Akash Girimath FXStreet

Polkadot (DOT) price struggles to keep the bullish momentum afloat as it breaks out of a three-month downtrend. This uptrend is undergoing a pullback which could undo the recent gains.

Also read: Polkadot price slightly picks up with increased spending, development adding fuel

Polkadot price ready to shoot higher

Polkadot (DOT) price rallied nearly 22% between October 20 and 26 and created a local top at $4.45. This rally, however, faced exhaustion, leading to a 6% correction to where DOT currently trades at $4.18.

Going forward, investors can expect Polkadot price to retest and consolidate around the $3.98 support level and attract sidelined buyers to extend the recent breakout into an uptrend. The Relative Strength Index (RSI), which is on the decline, is likely to find support at the 50 mean level, supporting the bullish outlook noted from a technical standpoint.

A bounce from this level is likely to propel Polkadot price to overcome the $4.31 resistance level and tag the subsequent hurdle at $4.80 and $5.

DOT/USDT 1-day chart

On the other hand, if Polkadot price fails to hold above the $3.98 or $3.90 support levels, it will signal a weak bullish camp. In such a case, DOT is likely to revisit the $3.70 barrier. A breakdown of this level on the daily time frame will invalidate the bullish thesis as it would threaten the continuation of a downtrend by the production of a lower low.

In such a case, Polkadot price could revisit the $3.50 support level.

Also read: Web3 Foundation deploying 5 million DOT to fund projects could act as a savior to Polkadot price

Author

Akash Girimath

FXStreet

Akash Girimath is a Mechanical Engineer interested in the chaos of the financial markets. Trying to make sense of this convoluted yet fascinating space, he switched his engineering job to become a crypto reporter and analyst.