Polkadot (DOT) Risks Plunge if Price Fails to Hold $4

Key Takeaways

• The Polkadot (DOT) price failed to break out from a resistance trend line.
• DOT could create a triple bottom, though the pattern has not been confirmed.
• Will DOT confirm the pattern with a breakout, or does a price breakdown await?

The DOT price has increased since Aug. 5. It seemed to confirm its bullish trend reversal with a breakout above resistance on Sept. 26 but quickly invalidated the breakout with a decline under support.

Will DOT regain its footing and make another breakout attempt, or will it decline to new lows instead? Let’s find out.

Triple Bottom Pattern

The daily time frame DOT chart shows what could be a triple bottom pattern (white icons) inside the $4.05 minor support area. The triple bottom is a bullish pattern, usually leading to upward movements.

However, the price action is not entirely bullish. DOT broke out from a descending resistance trend line (black) but promptly fell below it, making the breakout a deviation.

Read More: Polkadot Price Prediction 2024: DOT Price Analysis

Furthermore, the Relative Strength Index (RSI) broke its bearish divergence trend line, even though the Moving Average Convergence/Divergence (MACD) trend line still holds.

As a result, the price action and indicator readings fail to confirm the trend’s direction.

DOT Price Breaks Down

While the daily time frame shows uncertainty, the shorter-term six-hour one leans bearish. The Polkadot crypto price broke down from an ascending support trend line that sloped upward since Aug. 5.

Before breaking down, DOT bounced above this trend line four times (white icons).

Additionally, technical indicators do not give any reversal signs. While the RSI is oversold, it has not generated any bearish divergence.

As a result, the most likely scenario is for the DOT to decline toward the Aug. 5 low of $3.62.

Conversely, reclaiming the ascending support trend line would take the DOT price back to the range high of $4.95. As of the time of writing, this seems less likely.

DOT Price Could Fall

While the daily time frame provides undetermined readings, the short-term DOT outlook is bearish. Unless the price reclaims its ascending support trend line, declining toward new lows is the most likely future outlook.