Polkadot’s (DOT) dropped below $4, aligning with CCN’s recent price analysis. The decline happened after DOT’s value experienced a 15% correction within the past week.
Despite the decline, the altcoin seemed to have formed a bullish pattern that usually precedes a notable rally.
However, other indicators have yet to validate the move. With this in place, here is how DOT might perform if it validates the pattern or not.
On the weekly chart, Polkadot’s price decline below $4 has led to the formation of a falling wedge. For context, a falling wedge is a bearish to bullish pattern that occurs after two downward trendlines almost converge at a point.
Historically, when this happens, DOT breaks out. For instance, as seen below, a falling wedge appeared between March and October 2024, with the price falling to $3.42.
Later, Polkadot’s price broke above the upper trendline and surged past $10 in December. If history repeats itself, DOT could be poised for another major breakout.
However, a key difference exists between the current price action and the previous surge. The Relative Strength Index (RSI) reading then climbed and supported the upswing.
As of this writing, the RSI, which measures momentum, is down to 39.91. This rating indicates bearish momentum. If this trend continues, DOT’s price might struggle to replicate the 170% hike it registered last December.
When the reading is positive, momentum is bullish. However, the MACD reading has declined to negative territory in this instance.
Failure to rebound to the positive region might keep DOT’s price trapped in the descending channel. If that is the case, DOT’s price might fail to validate a breakout above the falling wedge.
Bearish scenario: Should DOT fail to break past the upper trendline of the descending channel, the price might experience consolidation. However, if the MACD reading continues to drop, Polkadot’s price might experience an accelerated correction, which could drag it down to $3.
Bullish scenario: To validate the breakout, the RSI reading might have to follow the trend experienced in December. If that happens, DOT might breach the $5.53 resistance at the 0.236 Fibonacci level.
Once this happens, the altcoin’s next target might be a rally to $6.74. In a highly bullish market condition, its value could soar to $8.69.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
Victor Olanrewaju is a crypto analyst and reporter at CCN with deep roots in on-chain research and technical analysis. His crypto journey began in 2017, but it was the 2020 Uniswap airdrop that sparked a full-time pivot into the space.
With a foundation in copywriting, Victor honed his craft creating high-converting content for leading crypto brokers — most notably an XRP price prediction that ranked #1 on Google during the 2021 bull run.
He later joined AMBCrypto in 2022, where he combined storytelling with technical and on-chain analysis to cover key market narratives.
In 2024, he expanded his expertise at BeInCrypto, collaborating with analysts and using tools like Glassnode, Santiment, and IntoTheBlock to break down Bitcoin and altcoin trends.
At CCN, Victor covers the top cryptocurrencies, memecoins, macro shifts, blending real-time insights with deep-dive metrics.
He holds a Bachelor’s degree in Physics from the University of Ibadan, equipping him to simplify complex data for a wide audience. Follow his work or connect on LinkedIn or X.
