Polkadot price has been falling within a long-term descending wedge since June 13. This shortfall led to a low of $4.22 on 29 December, after which there was a rally.
The descending wedge is considered a bullish pattern, which means that it leads to a breakout most of the time. While the slope of the descending resistance line has not been confirmed, the bounce on December 29 validated it for the third time (green icon), making it a viable line.
Dot price growth has accelerated in the last 24 hours. If the upward move continues, the nearest resistance will be at $5.10, formed by a descending resistance line and the $5.10 horizontal resistance area.
On the other hand, a break above the wedge is likely to accelerate the decline towards at least $3.60. So, whether the price of Polkadot price analysis depends on whether the price will break out of the wedge or move down.
Polkadot Price Prediction for January Wedge Breakout Coming?
A closer look at the technical analysis from the daily time frame reveals two bullish signals, both related to the RSI.
First, the daily RSI broke above a short-term resistance line since early November (black). Such RSI breakouts are often preceded by similar movements in price.
Second, the daily RSI generated a bullish divergence (green line) before the breakout. The indicator is now moving towards the 50 line, which may also provide resistance. If the rate of increase for both RSI and DOT price sustains, the price will reach the $5.10 area at the same time the RSI reaches the 50 line.
Therefore, whether the price of Polkadot will break out or get rejected afterwards may determine the direction of the future trend.
To conclude, the most likely short-term price prediction for Polkadot is a move towards the $5.10 area. The movement of the dot coin price once it reaches there is still unclear. If price reaches there but fails to break out, it may still consolidate inside the wedge until an eventual breakout occurs. Hence, a bullish reversal is likely till DOT price breaks above the wedge.
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