Polkadot Price Prediction: DOT is getting ready to dump as technical levels flash red – FXStreet

John Isige John Isige

Polkadot pulled the uptrend a bit higher on Bitcoin's rally to new all-time highs near $22,000. The token almost recovered to the peak formed early December at $5.6. However, the price hit a barrier at $5.5. Regardless, a bearish pattern came into the picture, hinting at a gigantic correction.
DOT/USD seems to have formed a double-top pattern on the 4-hour chart after failing to break the resistance at $5.6. This is an extremely bearish technical reversal pattern that comes into the picture after an asset hits a high price point a couple of times. Note that there is usually a moderate price drop between the peaks.
The double-top pattern is confirmed in technical analysis when the asset dives' price under a support level that is equal to the low between the preceding two highs. Identification of a crucial support level helps to avoid failed double-top patterns.
DOT/USD 4-hour chart
DOT/USD 4-hour chart
In this case, Polkadot must break under the initial critical support at $5.2 to confirm the bearish formation. Meanwhile, the 200 Simple Moving Average on the 4-hour chart could cross above the 100 SMA, forming a death cross. A pattern like this is regarded as bearish and could lead to the asset losing momentum significantly.
The TD Sequential indicator has presented a sell signal on the DOT/USD 12-hour chart, adding credence to the bearish outlook. The bearish formation developed as a green nine candlestick anticipating a correction in one to four candlesticks.
A red two candlestick trading below a preceding red one candle could serve as confirmation that Polkadot is ready to drop further.
DOT/USD 12-hour chart
DOT/USD 12-hour chart
It is worth mentioning that Polkadot may continue with the uptrend above $5.6 and perhaps test the hurdle at $6 in the expected bearish formation is ignored. The Relative Strength Index is leveling under the overbought, which means DOT still has room for growth. Therefore, upward price action is still possible in the near term.

Information on these pages contains forward-looking statements that involve risks and uncertainties. Markets and instruments profiled on this page are for informational purposes only and should not in any way come across as a recommendation to buy or sell in these assets. You should do your own thorough research before making any investment decisions. FXStreet does not in any way guarantee that this information is free from mistakes, errors, or material misstatements. It also does not guarantee that this information is of a timely nature. Investing in Open Markets involves a great deal of risk, including the loss of all or a portion of your investment, as well as emotional distress. All risks, losses and costs associated with investing, including total loss of principal, are your responsibility. The views and opinions expressed in this article are those of the authors and do not necessarily reflect the official policy or position of FXStreet nor its advertisers. The author will not be held responsible for information that is found at the end of links posted on this page.
If not otherwise explicitly mentioned in the body of the article, at the time of writing, the author has no position in any stock mentioned in this article and no business relationship with any company mentioned. The author has not received compensation for writing this article, other than from FXStreet.
FXStreet and the author do not provide personalized recommendations. The author makes no representations as to the accuracy, completeness, or suitability of this information. FXStreet and the author will not be liable for any errors, omissions or any losses, injuries or damages arising from this information and its display or use. Errors and omissions excepted.
The author and FXStreet are not registered investment advisors and nothing in this article is intended to be investment advice.
Bitcoin price is consolidating between significant barriers and shows no signs of moving out yet. The ongoing move could likely face rejection resulting in a steep correction that could send BTC to revisit levels last seen almost a month ago.
Ethereum (ETH) price is set to give a little bit of a blow to short-sellers as ETH price made a miraculous recovery on the back of a bounce from the $1,043 handle. 
Judge Sarah Netburn ruled against the SEC’s motion to protect the William Hinman documents. This is considered a decisive win in the latest SEC v. Ripple ruling.
Solana Mobile started accepting pre-orders for Saga phones in select countries worldwide, according to a recent announcement. Analysts believe Solana’s price rally is short-lived and upside is capped at $44. 
Bitcoin price is consolidating between significant barriers and shows no signs of moving out yet. The ongoing move could likely face rejection resulting in a steep correction that could send BTC to revisit levels last seen almost a month ago.
Note: All information on this page is subject to change. The use of this website constitutes acceptance of our user agreement. Please read our privacy policy and legal disclaimer.
Trading foreign exchange on margin carries a high level of risk and may not be suitable for all investors. The high degree of leverage can work against you as well as for you. Before deciding to trade foreign exchange you should carefully consider your investment objectives, level of experience and risk appetite. The possibility exists that you could sustain a loss of some or all of your initial investment and therefore you should not invest money that you cannot afford to lose. You should be aware of all the risks associated with foreign exchange trading and seek advice from an independent financial advisor if you have any doubts.
Opinions expressed at FXStreet are those of the individual authors and do not necessarily represent the opinion of FXStreet or its management. FXStreet has not verified the accuracy or basis-in-fact of any claim or statement made by any independent author: errors and Omissions may occur.Any opinions, news, research, analyses, prices or other information contained on this website, by FXStreet, its employees, partners or contributors, is provided as general market commentary and does not constitute investment advice. FXStreet will not accept liability for any loss or damage, including without limitation to, any loss of profit, which may arise directly or indirectly from use of or reliance on such information.