Lorenzo Stroe
Independent Analyst
- Polkadot has been trading inside a broadening wedge pattern for the past 48 hours.
- The digital asset had a fakeout and is now at risk of falling towards $22.
- A crucial indicator is on the verge of presenting various sell signals for Polkadot.
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.
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