Polkadot (DOT) Eyes Reversal: Falling Wedge Signals Potential Toward $22

Polkadot (DOT) is displaying a positive price surge with increased buying momentum. During the last 24 hours, Polkadot has experienced an increase of almost 1.78%, indicating steady demand in the short term. It has registered a strong increase of 16.78% in the last week.

As of now, DOT is trading at $2.13 with a 24-hour trading volume of $235.36 million, registering an increase of 1.09% over the last 24 hours. The market capitalization of the token is at $3.52 billion, registering an increase of approximately 14.2% due to increased confidence.

Also Read: Polkadot (DOT) Price Plunge: Will DOT Bounce to $50 Soon?

Technical Structure Remains Cautious but Improving

From a technical standpoint, the token is attempting to witness the beginning of a short-term recovery from the oversold conditions on the weekly chart. However, the general trend is that the cryptocurrency is holding onto the bearish trend. It is still staying below the 20-week simple moving average (SMA) at $3.06. The upper band of the Bollinger Bands is set at $4.80.

However, the momentum indicators show deceleration in the selling pressure. The relative strength index (RSI) is currently around 36 for the weekly chart, showing weak momentum. Also, the MACD is in the negative zone, but the increasing histogram indicates weakening sell momentum. Strong support levels are around $2.00 and $1.30, while $2.70, $3.10, and $4.80 Bollinger Band levels act as resistances.

Falling Wedge Pattern Shapes Long-Term Outlook

According to crypto analyst @butterfly_chart, a clear falling wedge has been formed in the DOT weekly chart since peaking in 2021. This has been accompanied by a series of lower highs and lower lows, although it appears that bearishness has been slowing down. The token has just experienced a strong bounce from strong support levels at $1.70 to $1.90.

The current market activity at $2.11 corresponds to early accumulation, driven by higher market volumes against the lower boundary of the wedge. The immediate level of resistance lies between $2.60 and $2.80, then a strong breakout level exists between $3.20 and $3.50. It would mark a strong reversal from a downtrend if it closes above this downtrend line.

If the breakout is sustainable, the target prices are in sync with the measured move in the wedge. The initial targets are $5.00 to $5.50, then $8.00 to $10.50. On a stronger bullish cycle, the targets go to $18 to $22. A breach below $1.70 might reduce the bullish case to $1.30 to $1.50.

Also Read: Polkadot (DOT) Set to Soar: Price Targets $3 to $50 Revealed!