Polkadot (DOT) is showing promising signs of completing its corrective phase and preparing for a potential bullish breakout. Following a sharp decline from its peak at $11.65 on December 14, DOT has been consolidating in a complex corrective structure. Recent chart patterns suggest that the altcoin may be on the cusp of a significant price movement.
DOT Price Analysis: Navigating Correction and Stabilizing at Key Support
On the daily chart, Polkadot has been following a WXYXZ corrective pattern, signaling the end of its downward trend. Currently, DOT is stabilizing near the critical 0.618 Fibonacci retracement level at $6.45, a support zone often associated with potential reversals in the Elliott Wave Theory.
The price is currently testing a descending resistance trendline. If DOT breaks above this resistance at around $6.74, it could signal the start of a new bullish impulsive wave. The daily Relative Strength Index (RSI) remains neutral but is showing an upward trajectory, suggesting improving momentum in the market.
However, if the price fails to break the resistance, further downside could occur, with potential retracements towards $5.19, which coincides with the 0.786 Fibonacci retracement level. Despite this, the confluence of Fibonacci support around $6.31 increases the likelihood of a reversal from current levels.
DOT Price Prediction: Impulsive Wave Structure and Key Targets
On the 1-hour chart, a developing five-wave impulsive structure suggests that the price could soon initiate an upward movement. Wave (i) is expected to target the 0.5 Fibonacci retracement level at $7.34, followed by a corrective Wave (ii) potentially testing support near the $6.74–$6.45 range.
If Wave (ii) holds above $6.45, Wave (iii) could extend significantly higher, targeting key resistance levels at $8.22 (0.382 Fibonacci extension) and $9.32 (0.236 extension). These levels align with horizontal resistance seen on the daily chart, reinforcing their importance.
The overall price structure and momentum indicators favor a bullish scenario for Polkadot. However, failure to maintain support at $6.31 would expose the price to further downside, testing the $5.19 level. Traders will closely watch the next price movements for signs of a breakout or continued consolidation.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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