The Polkadot (DOT) price failed to break out from a key diagonal resistance line for the fourth time. It trades close to the convergence of important support and the aforementioned diagonal resistance.
While the daily time frame readings are unclear, short-term ones are leaning bullish due to the creation of a bullish pattern. Therefore, a breakout is slightly more likely.
Polkadot Price Gets Rejected for the Fourth Time
The daily time frame technical analysis shows that the DOT price has fallen under a descending resistance line since its yearly high of $7.90 on February 23. More recently, the line caused a rejection on July 21 (red icon). This was the fourth rejection since the aforementioned yearly high.
The DOT price has fallen since. However, it still trades above the $5.20 horizontal support area. Therefore, the price trades very close to the convergence of the $5.20 area and the descending resistance line. Whichever breaks first could determine the future trend direction.
The daily Relative Strength Index (RSI) shows an inconclusive value. The RSI, used as a momentum indicator, helps traders assess if a market is overbought or oversold, aiding in deciding whether to buy or sell an asset.
Bulls hold an advantage when the RSI reading is above 50, and the trend is upward. Conversely, when the reading is below 50, the situation is reversed. Currently, the daily RSI stands at 50, indicating a neutral trend.
DOT Price Prediction: Will Price Break Out From Bullish Pattern?
The short-term six-hour time frame shows a slightly more bullish picture. The DOT price has traded inside an ascending triangle since July 7. The ascending triangle is considered a bullish pattern, meaning that a breakout from it is the most likely future price scenario.
Currently, DOT trades very close to the triangle’s support line. Therefore, if the pattern proves correct, a sharp bounce will occur soon, eventually leading to a breakout.
If this occurs, it will also cause a breakout from the long-term descending resistance line. Therefore, it could trigger a sharp increase toward $6.
Despite this bullish DOT price prediction, a breakdown from the support line will invalidate the bullish triangle. In that case, the DOT price could drop to the next closest support at $4.80.
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