Polkadot Price Forecast: DOT at risk of a drop towards $22 after significant rejection

Polkadot defended a key support level on February 10 and bounced significantly towards a new all-time high at $25.7. However, the breakout above the previous high was notably weak and the digital asset saw a quick pullback down to $24.5. 

Polkadot price shows signs of an upcoming correction

On the 1-hour chart, Polkadot established a broadening wedge pattern and several hours ago, bulls attempted a breakout above the upper resistance trendline. Unfortunately, it had no continuation and transformed into a fakeout as the digital asset quickly dropped below the trendline again.

DOT/USD 1-hour chart

The nearest support level is located at $23.7 which is the 50-SMA, if this level also breaks, Polkadot price can fall towards the lower trendline support of the pattern located at $22.3 which coincides with the 100-SMA. 

DOT Sell Signals

Additionally, the TD Sequential indicator presented a sell signal on the 2-hour chart and a green ‘8’ candlestick on the 12-hour chart which can easily transform into another sell signal, adding even more credence to the bearish outlook.

DOT/USD 1-hour chart

However, Polkadot price is still close to the upper trendline resistance at $25.4. Another breakout above this point would have a 12% price target up to $28.7 if there is enough bullish continuation.