DOT and the DeFi Index Rally Towards New Highs

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In Brief
  • DOT reached an all-time high price on Jan. 16.

  • There is resistance at $26 and support at $15.

  • The DeFi index reached an all-time high on Jan. 19.

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The Polkadot (DOT) price reached an all-time high price on Jan. 16, while the DeFi index followed suit three days later.



Both should continue increasing towards their closest respective resistance areas.

All-Time High Price

DOT has been increasing rapidly since breaking out from a descending resistance line on Dec. 28, 2020. DOT continued to rally and reached an all-time high price of $19.40 on Jan. 16.



The rate of increase has turned parabolic, and technical indicators have begun to show weakness. While the MACD is still increasing, the RSI has formed bearish divergence, and the Stochastic Oscillator is close to making a bearish cross.

Chart By TradingView

DOT’s Short-Term Movement

Cryptocurrency trader @CryptoMichNL outlined a DOT chart, stating that it has reached the first support area at $14.50 and is likely to bounce from here.

Source: Twitter

The shorter-term two-hour chart shows that DOT is following a descending resistance line. It continued to track this line after reaching the previous all-time high price on Jan. 16.

Currently, DOT is in the process of breaking out after bouncing on the $15 support area this morning. Technical indicators are bullish and support the potential for a breakout.

Chart By TradingView

If it does, the most likely target for the next resistance area is at $26, the 3.61 Fib extension of wave 1 (shown in white below). The next target would be at $32, the 4.61 Fib extension of the same wave.

Chart By TradingView

The DeFi Index

The DeFi index reached an all-time high of $1,391 on Jan. 19. While it dropped afterward, breaking down from the $1,050 level, it is currently in the process of reclaiming it.

Furthermore, the RSI has generated significant hidden bullish divergence, a sign of a trend continuation. If the index moves upwards as expected, the next closest resistance areas are at $1,400 and $1,800, respectively.

DeFi Chart By TradingView

Conclusion

To conclude, both DOT and the DeFi index should continue increasing towards their closest resistance areas at $26 and $1,400, respectively.

For BeInCrypto’s latest Bitcoin (BTC) analysis, click here!

Disclaimer

All the information contained on our website is published in good faith and for general information purposes only. Any action the reader takes upon the information found on our website is strictly at their own risk.
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Valdrin is a cryptocurrency enthusiast and financial trader. After obtaining a masters degree in Financial Markets at the Barcelona Graduate School of Economics he began working at the Ministry of Economic Development in his native country of Kosovo. In 2019, he decided to focus full-time on cryptocurrencies and trading.

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