admin • The DOT price has been declining, forming a descending triangle pattern in the 1-day chart.
• There is potential for a bullish reversal due to the formation of double bottom pattern at $4.29 and bullish divergence seen in the daily RSI line.
• If the reversal rally breaks above the triangle, the DOT price can jump to $6.30.
DOT Price Analysis
The DOT price has been declining, forming a descending triangle pattern in the 1-day chart which has resulted in minimal YTD growth for Polkadot. However, there is potential for a bullish reversal due to the formation of double bottom pattern at $4.29 and bullish divergence seen in the daily RSI line.
Supporting Factors
The strong use case and development activities surrounding Polkadot set up a potentially bullish future with USD Coin from Circle soon to be available on Polkadot project. Additionally, this downward trend was capped by support level at $4.29 which previously provided crucial bounce backs and absorbed spike in supply inflow throughout 2023.
Potential Reversal Rally
Optimistically, if the reversal rally breaks above the triangle, Polkadot could launch moonshot as it rechallenges overhead resistance trendline slightly above $5 resulting in an increase of DOT price up to $6.30 mark.
Downside Scenario
On other hand, if bearish breakdown occurs below $4.29 support level, then DOT price may plunge down to unprecedented low of $2.27 mark leading to further decline in YTD gains for Polkadot token holders .
Conclusion
Despite its declining value so far this year , Polkadot’s use case and development activity continues to prove that there is still plenty of potential within this cryptocurrency project . With possible scenarios ranging from Ethereum-level success or further losses , traders should keep an eye on how these factors play out over time .