The Polkadot Value faces a problem because the catalysts for DOT correction multiply – FXStreet

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  • Polkadot price hits the 50% retracement of the May-July cyclical correction, but the 200-day Simple Moving Average (SMA) pulls on it.
  • DOT is holding the July ascending trendline creating an extremely overbought condition in the daily Relative Strength Index (RSI).
  • DOT heads into the weekend with the potential to close for the first time with five consecutive positive weeks.

Polkadot price has seen a huge spike since its July low, seeing a 185% increase from today’s high. The rally was only interrupted by seven negative days as it stretches to overtake the 200-day SMA on a daily closing basis. However, the alignment of the 200-day SMA with multiple highs in late May and June creates the first credible resistance for DOT since the July 7th high of $ 17.88. At the same time, the six-hour chart is showing a bearish momentum divergence, adding to the challenge that is now emerging for the digital coin.

Polkadot Prize rewrites the meaning of relentless

Polkadot price has carved out a leading position for the cryptocurrency market, rising 185% since the July low while maintaining constant support at or near the rising trend line from July. The intransigence of the rally has overtaken the resistance created by the 38.2% Fibonacci retracement of the May-July correction at $ 25.78 and possibly the 200-day SMA at $ 27.54 today (depending on today’s close) is defined.

A potential warning for future polkadot price explosions is the appearance of a bearish momentum divergence on the six-hour chart at today’s high. The bearish momentum divergences at the August 7th and 11th highs resulted in 14% and 12% pullbacks, respectively, but in no case did DOT attempt to break a level or range of resistance as it is now.

A pullback of 14% would pull polkadot price below the ascending July trendline, putting the DOT within striking distance of the 50-six-hour SMA at $ 22.97.

DOT / USD 6 hour chart

On the daily chart, the polkadot price has not registered a bearish momentum divergence. Instead, the daily RSI is approaching its highest level since the February high, indicating an extremely overbought condition and increasing the likelihood of a DOT reversal. The extreme reading coincides with today’s efforts to break the 200-day SMA and run to the 50% retracement of the May-July correction at $ 30.55.

The complexity of the DOT charts is increased by the presence of polkadot price jams between the 38.2% and 50% retracement levels that go back to the beginning of the year, including the late February lows and the March and April lows. Price overload halted the rebound after the May 19 collapse and two upward moves in June.

To confirm the cautious outlook, the Polkadot price needs to close below the 38.2% retracement level and the July ascending trendline of now $ 24.57.

DOT / USD daily chart

DOT / USD daily chart

A daily close above the 50% retracement at $ 30.55 would undo the cautious outlook and turn the resistance area into support, forecasting better Polkadot price results.

The catalysts are in place for a longer and deeper Polkadot price retracement, an extremely overbought value in the daily RSI, the bearish momentum divergence on the DOT six-hour chart, and the convergence of several significant highs and lows between the two Fibonacci Levels.


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