Polkadot price stabilizes as bulls target $24

Polkadot price continues to coil into a tighter and tighter range, hinting a big move is coming very soon.
Bulls keep DOT above key Ichimoku support levels.
A return to $24 is critical before any new uptrend can develop.

Jonathan Morgan Independent Analyst

Polkadot price action develops congestion before a major breakout

Polkadot price action, in many ways, is showing more bullish developments than many altcoins. Moreover, several time and price factors point to a very optimistic outlook for DOT in the immediate future.

From a time cycle perspective, Polkadot price is at the tail end of one of Gann’s most important Cycles of the Inner Year: the 240-day cycle, which Gann said is often a swing low if the long-term trend is bullish. March 17 is 240-days from the July 20, 2021 low. Very close to the critical Gann Seasonal Date of March 21.

DOT/USD Weekly Ichimoku Kinko Hyo Chart

The second time cycle of importance is the Kump Twist (black vertical line), which occurs this week. Kumo Twist’s are periods where Senkou Span A crosses Senkou Span B - changing the Cloud from red to green (or green to red). It can also signify a probable swing high/low if a market has been trending strongly into the Kumo Twist.

The time cycles all point to a change in direction for Polkadot price - which correlates perfectly with DOT’s Point and Figure chart.

Polkadot price continues to have one of the longest-lasting Spike Patterns on its Point and Figure chart of the entire cryptocurrency market. The beginning of the current O-column was first developed on November 3, 2021, with the last O column appearing on February 23d.

Since November 3, 2021, DOT has yet to have a reversal column of Xs develop. Although no time factor exists on a Point and Figure chart, the length of time without a reversal is notable and considerable.

A Spike Pattern is any column with fifteen or more Xs or Os. It represents extremes and overdone movements. The entry off of a Spike Pattern is the three-box reversal. Compared to other patterns in Point and Figure analysis, the Spike Pattern requires active management and is a more aggressive entry.

The theoretical long entry remains buy stop order is at $24, a stop loss at $16, and a profit target at $100. The profit target is derived from the Vertical Profit Target Method in Point and Figure analysis and should not be viewed as a target likely to hit anytime soon.

Because it is a Spike Pattern, the low of the current O-column is not known. Therefore, if Polkadot price moves lower, the entry and four-box stop loss moves in tandem with price.

DOT/USD $2.00/3-box Reversal Point and Figure Chart

Given the resistance levels that have been discussed in prior analysis and on the existing Ichimoku charts, the $35 to $40 value area is likely to stop Polkadot’s initial rally from the entry.

Additionally, because it is a Spike Pattern, the low of the current O-column is not known. Therefore, if the Polkadot price moves lower, the entry and four-box stop loss moves in tandem with price.

Downside risks could easily extend below the 2022 low towards the last high volume node from the 2021 Volume Profile at $10.00.

Author

Jonathan Morgan

Independent Analyst

Jonathan has been working as an Independent future, forex, and cryptocurrency trader and analyst for 8 years. He also has been writing for the past 5 years.