Over the past 8 months, Polkadot (DOT) price has seen a series of formations of lower tops and lower bottoms, i.e. downtrend. This descending trend line showed a clear decline and acted as a major resistance that limited the appreciation of the cryptocurrency.
However, the new year’s rebound in the market also benefited the Ministry of Transport. As a result, the coin price witnessed a V-shaped recovery from the $4,233 support level.
This move made the price of DOT rise by 60% since January and reached the current price of $6.53. But the scenario of a new rise could push the Ministry of Transport to register another 10% hike in the coming days – understand the possible scenario.
DOT Analysis Source: TradingView.
Trend line break
Amidst the ongoing recovery in the market, the DOT price witnessed a significant breakout of the trend line that had been established since January 14th. This breakout should have freed market participants from selling on the uptrend to buying on the downside.
As a result, DOT price extended its bullish recovery and is currently challenging the local resistance at $6.75. It even approached this resistance, but temporarily lost ground and dropped to the $6.50 area.
Now everything depends on the result of the daily chart, which closes at 9 pm (Brasilia time). If the daily candle can break above this horizontal resistance, the bulls will get another higher base to continue the uptrend.
The following goals
This potential breakout could send the price of DOT up by 10% to reach the $7.4 mark.
However, according to the technical setup, every lower high that was held during the decline could be a potential target after the resistance is broken. Therefore, if the uptrend continues, DOT will reach the following marks: $8, $9.76, or $11.8.
On the other hand, if the DOT price fails to overcome this hurdle, there is a possibility of a strong pullback. In this regard, the first support range for DOT is the $5.60 area, or 14.24% down from the current price.