Polkadot price still targets $70 despite DOT rally taking short breather

Since July, Polkadot (DOT) has been in a very solid uptrend and is forming a consistent pattern at times when bulls are taking a profit. At the moment, Polkadot price is again in a similar situation with a repeating pattern that keeps price action elevated and avoids any heavy corrections. With this repetition, the Polkadot price rally could offer another 40% of gains towards $70.  

Polkadot price pennant offers a window of opportunity for bulls

Polkadot price is blowing off some steam after another leg higher and hitting $56.15 which is a new high for the altcoin. With that move, the Relative Strength Index (RSI) has shot above 70 into overbought territory, triggering an outflow of bulls who have started cashing in on their profits. DOT price action, however, is very much contained in its correction and moving around the level of a previous historical high made on May 15 at $50.76.

With that move, DOT price is forming a pennant, which offers bulls a good opportunity to re-enter with long positions on the ascending side of the technical setup. In the meantime, the RSI has the opportunity to cool down a bit and drift back towards more moderate levels around 50. Bulls will gladly pick up DOT price again as more upside potential is now present in the rally.     

DOT/USD daily chart

DOT price still has some room to go before completing the pennant, as we saw in the period around September and the late end of August, where again two pennants were formed. Each time a rapid breakout followed that held around 10% to 20% of profits. With the current tailwinds in cryptocurrencies, expect this pattern to repeat two more times before DOT price hits $70, near the monthly R3 resistance level. 

In case the pennant breaks to the downside, expect a short-term nose dive in Polkadot price action towards $45.22, which will be the first level of support. If that does not hold, the price could fall further to around $40, where the monthly pivot and the 55-day Simple Moving Average (SMA) come in and are likely to provide bullish supporting elements. With that move, the RSI will probably enter oversold territory, attracting even more bulls towards DOT price action.