Polkadot (DOT) is approaching the strong support area showing a bullish signal
Polkadot (DOT) has bounced back from key support area and is showing bullish reversal signs. However, it will have to break the short-term descending resistance line to confirm the reversal.
The Polkadot has been down since Nov. 4 when it hit an all-time high of $ 55.19. The subsequent decline suggests that the breakout was just a divergence (red circle) as the DOT fell below the $ 48 horizontal zone shortly thereafter.
As of December 4th, the token has been trading in the USD 27 area which is an important area of support as it is both a 0.618 Fib retracement level and a horizontal area of support. In order for the uptrend to continue, it is therefore important that the DOT stay above this level.
Technical indicators in the daily timeframe are starting to show bullish signals.
The MACD, formed from the short and long-term moving averages (MA), has created a bullish divergence. In addition, his histogram produced several consecutive bars with higher momentum. Despite the fact that it is still in negative territory, it is showing potential signs of an upside reversal.
Likewise, the RSI has crossed the threshold of 30 and also created a bullish divergence (green line). The RSI is a momentum indicator where values below 50 are considered bearish. The indicator is still below this level. However, the fact that it has just passed the 30 mark means exhausting the selling pressure.
DOT / USDT daily chart | Source: TradingView
Trader @CryptoCapo_ tweeted a DOT chart stating that the trend will remain bullish as long as the token holds the USD 27 support area, which is in line with signals from the daily timeframe.
The source: Twitter
Short term movement
The shorter-term six-hour chart shows that the DOT has been moving along a descending resistance line since the aforementioned all-time high. This shows that the token corrects in the short term.
Similar to the daily timeframe, both the 6-hour RSI and MACD create bullish divergences.
When a breakout occurs above the resistance level, the next resistance is between $ 36.40 and $ 40. This zone is formed by the 0.382-0.5 Fib resistance levels and the horizontal resistance of the zone.
DOT / USDT 6-hour chart | Source: TradingView
You can see the DOT prices here.
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Disclaimer: This article is for informational purposes only, not investment advice. Investors should research carefully before making a decision. We are not responsible for your investment decisions.