Polkadot (DOT) Attempts to Reclaim Crucial Resistance Level

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In Brief
  • Polkadot is facing resistance from the $15 level.

  • DOT is possibly trading inside a descending wedge.

  • It has completed a bearish impulse pattern.

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Polkadot (DOT) made an unsuccessful attempt at reclaiming the $15 resistance level on July 26.

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However, DOT appears to be trading inside a bullish pattern, from which a breakout is expected. This could cause a reclamation of the aforementioned $15 resistance area.

DOT attempts to reclaim range

DOT has been moving downwards since reaching an all-time high price of $49.78 on May 15. It initially rebounded at the $15 horizontal support area, creating a long lower wick on May 13. 

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However, the price broke down on July 13 and eventually hit a low of $10.37 seven days later. 

DOT has been increasing since then and made an unsuccessful attempt at reclaiming the $15 area on July 16.

Technical indicators are showing mostly bullish signals, but have not confirmed a bullish reversal. The MACD is increasing and has generated bullish divergence and the Stochastic oscillator has made a bullish cross. 

However, the RSI is still below 50 and the MACD is not yet positive.

The next closest support area is found at $8.

DOT Chart By TradingView

Cryptocurrency trader @Trader_XO outlined a DOT chart, stating that it could return to the $20 range. However, in order to do so, it has to reclaim the aforementioned $15 resistance area. A look at lower time frames can help determine the liklihood of this happening.

Source: Twitter

Potential breakout

The six-hour chart shows that DOT has been trading inside a descending wedge since May 19. The descending wedge is often considered a bullish pattern, therefore a breakout from would be likely.

The two most recent touches of the support line have been combined with bullish divergences in the MACD and RSI. The latter has now moved above the 50-line. 

Therefore, a breakout from the wedge is expected. This move could possibly take DOT to the $20.84 resistance level.

DOT Chart By TradingView

Wave count

The wave count shows that DOT has completed a bearish impulse with sufficient alternation between waves 2 and 4 that lasted from June 3 to July 20. 

While the pattern resulting from the bottom is not yet clear, some type of retracement is expected, whether its an A-B-C structure or a bullish impulse.

DOT Chart By TradingView

For BeInCrypto’s latest bitcoin (BTC) analysis, click here. 

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Valdrin discovered cryptocurrencies while he was getting his MSc in Financial Markets from the Barcelona graduate school of Economics. Shortly after graduating, he began writing for several different cryptocurrency related websites as a freelancer before eventually taking on the role of BeInCrypto's Senior Analyst.

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