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Polkadot (DOT) has been moving downwards since May 15, when it reached an all-time high of $49.78.
While it has temporarily halted the decrease with a significant bounce, the bullish reversal is not confirmed yet.
Polkadot drops after all-time high
Polkadot has been decreasing since May 15. The drop has been sharp and swift — in a period of only eight days, DOT has fallen by nearly 73%.
While there has been a slight resurgence since May 23, it has been weak.
Technical indicators are bearish. The Stochastic oscillator has made a bearish cross, the MACD is negative, and the RSI is below 50.
The main resistance area is found at $29. The level had previously been acting as support since Feb. 8. Until it’s reclaimed, we cannot consider the trend bullish.
Last week, the DOT team announced the integration of PARSIQ smart triggers. It remains to be seen if this announcement will have any positive long-term effect on the price of the token.
Short-term movement
The two-hour chart is more bullish. It shows a descending wedge, from which DOT has potentially broken out.
The breakout was preceded by a strong bullish divergence in both the RSI and MACD.
It’s possible that this is the beginning of the upward movement that will cause DOT to reclaim the $29 level. However, this is not yet confirmed.
Until the $29 area is reclaimed, we cannot confidently suggest that the trend is bullish.
DOT wave count
Cryptocurrency trader @Thetradinghubb outlined a DOT chart, stating that the correction is complete and the token is likely going to reach new highs.
This could occur according to the wave count. It’s possible that Polkadot has just completed wave four (white) of a five-wave bullish impulse.
However, this scenario is not yet confirmed. While DOT has bounced at the 0.786 Fib retracement level, it has not given any clear bullish reversal signs, as seen by technical indicators in the daily time frame.
Reclaiming the $29 area is crucial for this scenario to transpire.
In addition, the invalidation level is considerably below the current price, falling at the wave one high of $6.80.
For BeInCrypto’s latest bitcoin (BTC) analysis, click here.
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