• Polkadot price has created a double bottom at $5.95 and hints at a potential reversal.
  • Although a 45% upswing to $9.35 seems likely, investors must prepare for a potential sweep of $5.95 first. 
  • A daily candlestick close below $5.95 will create a lower low and invalidate the bullish scenario for DOT.

Polkadot price has been hovering below a previously formed range for quite some time. The recent venture below a level has led to a bottom reversal formation that could result in a swift rally. Investors could get a window to purchase DOT at a discount.

Polkadot price builds up the momentum

Polkadot price formed a range, extending from $6.85 to $11.86 as it rallied roughly 72% between May 12 and 16. This explosive move set the stage for the price action to come for months. 

Since May 12, DOT has deviated below the range low twice and has set up a double bottom at $5.95. While this technical formation is bullish and forecasts an 82% run-up to $11.86, the upward tracjectory is likely to be uneven.

The most obvious scenario would include DOT flipping above the range low at $6.85, which will be the first bullish confirmation. Beyond this level, Polkadot price could attempt a retest of the range’s midpoint at $9.35, which would constitute a 45% gain from $6.43.

While the aforementioned outlook is logical, it is unlikely since Bitcoin price has no directional bias and is undergoing a range tightening. Therefore, investors should be open for a potential sweep of the $5.95 level to collect the sell-stop liquidity before a revisit of $9.35.

DOT/USDT 4-hour chart

DOT/USDT 4-hour chart

While things are looking up for Polkadot price, a U-turn in Bitcoin price could ruin the perfectly bullish setup on DOT. Therefore, investors need to keep a close eye on the $5.95 level. A daily candlestick close below this level would create a lower low and invalidate the double bottom narrative.

This development would also invalidate bullish scenario and potentially trigger a further crash in Polkadot price to $5.46.

Note:

The video attached below talks about Bitcoin price and its potential outlook, however, this is still relevant as it is likely to influence Polkadot price

 


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.

Recommended content


Recommended Content

Editors’ Picks

Bitcoin Weekly Forecast: Fed-led rally could have legs towards $65,000

Bitcoin Weekly Forecast: Fed-led rally could have legs towards $65,000

Bitcoin has risen 7% so far this week, supported by the US Fed interest-rate cut and more than $300 million in ETFs inflows. The recent surge led BTC price to shatter several key technical resistance levels, a sign that the current two-week rally has likely some more way to go towards $65,000.

More Bitcoin News
Ethereum, BNB and POL holders on the watch as BingX faces loss of $26 million in hack

Ethereum, BNB and POL holders on the watch as BingX faces loss of $26 million in hack

Crypto exchange BingX said on Friday that it suffered a hack, an attack that led to “minimal” losses that researchers at PeckShield estimate at $26.68 million.  The attacker swapped the stolen altcoins for Ethereum, Binance Coin and Polygon tokens, according to on-chain data. 

More Cryptocurrencies News
Pepe price forecast: Eyes for 30% rally

Pepe price forecast: Eyes for 30% rally

Pepe extends the upward movement on Friday after breaking above the descending trendline and resistance barrier on Thursday. PEPE’s dormant wallets are in motion, and the long-to-short ratio is above one, further supporting this bullish move and hinting at a rally on the horizon.

More PEPE News
Shiba Inu is poised for a rally as price action and on-chain metrics signal bullish momentum

Shiba Inu is poised for a rally as price action and on-chain metrics signal bullish momentum

Shiba Inu remains strong on Friday after breaking above a symmetrical triangle pattern on Thursday. This breakout signals bullish momentum, further bolstered by a rise in daily new transactions that suggests a potential rally in the coming days.

More Shiba Inu News
Bitcoin: On the road to $60,000

Bitcoin: On the road to $60,000

Bitcoin price retested and bounced off from the daily support level of $56,000 this week. US spot Bitcoin ETFs posted $140.7 million in inflows until Thursday and on-chain data supports a bullish outlook.

Read full analysis
Moneta Markets review 2024: All you need to know

Moneta Markets review 2024: All you need to know

VERIFIED In this review, the FXStreet team provides an independent and thorough analysis based on direct testing and real experiences with Moneta Markets – an excellent broker for novice to intermediate forex traders who want to broaden their knowledge base.

Read More

BTC

ETH

XRP