- Polkadot price has surged nearly 10% after breaking out of a bullish pennant pattern.
- The MRI indicator’s cycle top signal could momentarily deter the upswing.
- A bearish scenario might evolve if DOT drops below $37.5.
The Polkadot price has been on a tear for more than ten days and could take a slight pause before resuming its uptrend.
Polkadot price faces momentary pause
The Polkadot price slid into consolidation after rallying 190% between January 22 and April 4. While the initial spike can be considered as a flag pole, the one that followed it can be viewed as a pennant.
DOT converged between two trend lines setting up lower highs and higher lows in the consolidation phase, creating a pennant. The technical formation is a continuation pattern and projects a 63% upswing, determined by adding the flagpole's height to the breakout point at $38.
This target places DOT at $62.44, a new all-time high.
As of April 2, the Polkadot price sliced through the pennant’s upper trend line, signaling the start of a new uptrend.
Since March 25, the DeFi token has surged nearly 57%, triggering the Momentum Reversal Indicator’s cycle top signal in the form of a red one candlestick on the daily chart. This setup forecasts a one-to-four candlestick correction.
Hence, DOT could see a minor correction unfold toward the immediate demand barrier at $42.39 before resuming its uptrend toward the intended target at $62.44.
DOT/USD 1-day chart
While things seem bullish for the Polkadot price, investors need to pay close attention to the retracement. If this pullback extends beyond $37.5, it will put the bullish outlook on hold and perhaps trigger a bearish one.
In such a scenario, panicking investors might sell their holdings pushing DOT back into the pennant formation to retest the subsequent demand barrier at $33.7, which coincides with the 78.6% Fibonacci retracement level.
Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.