Key Takeaways
Polkadot (DOT) is exhibiting signs of completing a corrective phase on its higher time frame and appears poised to start a new impulsive wave.
The daily chart reveals a descending WXYXZ pattern nearing its conclusion, while the 1-hour chart shows the initial stages of a potential upward impulsive structure.
This analysis evaluates the market’s position and projects the possible next moves.
The daily chart shows that Polkadot has been in a prolonged correction since its peak at $11.65 on Dec. 14. It completed a five-wave impulsive structure before transitioning into a complex WXYXZ corrective pattern.
The price stabilizes near the 0.618 Fibonacci retracement level at $6.45, a critical support zone that usually acts as a reversal point in the Elliott Wave Theory.
The descending resistance trendline from the corrective structure is being tested, with the current price hovering near $6.74. A breakout above this level likely confirms the start of a new bullish impulsive wave.
The daily Relative Strength Index (RSI) remains neutral, but its upward trajectory suggests improving momentum.
Should the price fail to break the descending resistance, deeper retracements toward $5.19 (0.786 Fibonacci retracement) could occur.
However, the confluence of Fibonacci support and horizontal levels around $6.31 increases the likelihood of a reversal from current levels.
The 1-hour chart shows the possible outcome of an impulsive five-wave structure. Wave (i) targets the 0.5 Fibonacci retracement level at $7.34, with Wave (ii) correcting downward to test support near the 0.618 Fibonacci retracement level ($6.74–$6.45).
This corrective wave aligns with a reset in RSI momentum, creating a favorable setup for the next upward leg.
If Wave (ii) holds above $6.45, Wave (iii) could extend significantly higher, targeting the 0.382 Fibonacci extension at $8.22 and the 0.236 extension at $9.32.
These targets align with horizontal resistance levels on the daily chart, reinforcing their significance.
A failure to hold the $6.31 support would invalidate this impulsive wave structure, exposing the price to a retest of $5.19 (0.786 retracement).
However, the overall price structure and momentum indicators favor the bullish scenario.