Polkadot (DOT), a popular cryptocurrency in the blockchain space, is making waves with its innovative approach to interoperability and scalability. However, like any other financial asset, its price movements are subject to various technical analysis patterns, one of which is the rising wedge chart pattern.
A rising wedge pattern is forming on DOT’s price chart despite its recent upward trajectory. There may be a recession On the horizon. Traders and investors often watch for confirmatory signals, such as a breakout of the bottom of a wedge, to confirm the validity of a pattern and anticipate potential selling pressure.
Currently, the price of DOT is down -0.13%, trading around $7.13, and as of this writing, it has a market capitalization of over $10 billion and a trading volume of over $153 million. The previous day’s market capitalization decreased by 0.39%, but trading volume increased by 0.34%.
With the help of 100-day Simple Moving Average (SMA) and Relative Strength Index (RSI), this analysis was performed using both 4-hour and daily time frames.
An analytical perspective on the current price situation of DOT
Currently on the 4-hour chart, DOT is still trading sideways, with the top and bottom of the wedge forming momentum below the 100-day simple moving average.
The 4-hour Relative Strength Index shows that the RSI line is trending slightly below the 50% level, indicating that DOT price may fall below the bottom of the wedge. This RSI formation could suggest that if DOT falls below the wedge, it will begin a downward move towards the nearest major support level.
Meanwhile, on the 1-day chart, the price of DOT is trending within the wedge, but close to the lower base. The 1-day RSI also suggests that DOT may be on the decline as the RSI line attempts to cross below the 50% level. In this RSI formation, investors should be careful to take a break below the wedge before taking a sell position.
Potential price action on breakout
Currently, the price of the cryptocurrency asset is still moving within the wedge, and DOT will likely start falling towards the $4.8 support level if a breakout occurs below the wedge. If the price falls below the aforementioned level, it may fall further to test the $3.5 support level.
On the other hand, if the price changes direction and breaks above the upper base of the wedge, it will start to rise towards the $9.8 resistance level. A break above this level will likely push Polkadot higher to test the $11.9 resistance level. Additionally, DOT could see a stronger upside for more testing. considerable level If it closes above $11.9.
Featured image from Adobe Stock, chart from Tradingview.com