The prices of both DIA (DIA) and Polkadot (DOT) have deviated above important resistance levels but fallen back below them since.
Despite their declines, both still have potential bullish structures in place that would create higher lows if they were to hold.
DIA Breaks Out But Gets Rejected
On Nov. 21, the DIA price broke out from a descending resistance line (dotted) that had previously been in place since Sept. 23. The breakout was the catalyst for a significant upward move which culminated in a high of $1.87 on Nov. 23.
However, the $1.85 resistance area rejected the price and it dropped sharply afterward. Nevertheless, the decline only served to validate the resistance line as support and the price is still trading above it.
In addition, it’s possible that DIA is following an ascending support line. As long as the price is trading above this line/area, it should attempt another breakout.
Cryptocurrency trader @PostyXBT outlined a DIA chart, stating that he’s buying at the re-test of the current support area and aiming for an increase towards $1.85.
The shorter-term six-hour chart shows that the price is approaching support at $1.21, both a horizontal support area and the 0.618 Fib retracement level of the entire upward move.
Furthermore, this level also coincides with the possible ascending support line, which has not been validated enough times yet.
As long as the price is trading above this support area, it should eventually make another attempt to reach the $1.85 resistance area.
However, technical indicators do not yet give any bullish reversal signs. If the support area/line were to fail, the next support would be at $0.90.
DOT Deviates Above Range High
Unlike DIA, the DOT price actually broke out above its main resistance area, which is at $5.60. However, the breakout turned out only to be a deviation since the price fell right back below it shortly afterward.
Similarly to DIA, DOT is following an ascending support line and has almost reached it in the form of a long lower wick.
The shorter-term chart shows that the support line coincides with the $4.35 support, both a horizontal support area and the 0.786 Fib retracement level.
As long as the area/line holds, DOT will likely move upwards and make another breakout attempt.
To conclude, both DIA and DOT are approaching important support levels that would create higher lows and a bullish structure if they were to hold. However, there are no bullish reversal signs yet in either pair.
Disclaimer: Cryptocurrency trading carries a high level of risk and may not be suitable for all investors. The views expressed in this article do not reflect those of BeInCrypto