It’s natural to be hunting for attractive investments in the altcoin market right now. Once market leader Bitcoin scales to a new ATH, alts would be waiting in the wings for a rally of their own. Now Polkadot makes a strong argument that its anticipated jump would come sooner than most of its peers, owing to bullish market conditions.
Currently trading at a 335% premium when compared to its July lows, DOT has come a long way since the late-May crypto crash. A head and shoulders setup followed by a horizontal channel breakout has kept DOT within striking distance of a new ATH. However, some near-term tailwinds could keep DOT grounded before ascending to newer price levels.
Polkadot 4-hour Chart
Source: DOT/USD, TradingView
DOT’s price seemed to forming yet another up-channel after a breakout from a similar pattern just last week. With DOT at the risk of a potential breakdown below the lower trendline, focus should be on defensive resources at $37.5-$38.5 and the 50-SMA (yellow). Should bulls run rambunctious from these support lines, expect a breakout above $44.3-$45 and a new ATH above the $50-mark.
However, if bearish pressure is constant around the $45, support areas of $33.5, $35 and $29 could allow DOT some to thin out some losses before embarking on a rally.
Reasoning
For the moment, there were some red flags visible on DOT’s 4-hour timeframe. The Awesome Oscillator’s double top and MACD’s bearish crossover presented near-term tailwinds that needed to be overcome. RSI’s move below 50 was also not promising, but the lower boundary of its parallel-channel could offer some relief and a spur a comeback.
ConclusionÂ
DOT was well within a long-term bullish bias but there were several hurdles with respect to its near-term trajectory. These would be amplified in case DOT broke below pattern- a development which could delay a new ATH.
