A push higher for Polkadot this week has sent a bullish, short-term, technical analysis signal on the chart. This price action sets the risk for a higher price forecast into December and maybe on into early 2023.
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Polkadot Trying to Base
The cryptocurrency, Polkadot (DOT) has posted solid gains this week, alongside the wider cryptocurrency market, with a broader “risk on” theme seen across global financial markets assets, led by the recent strong gains in US and global stock markets.This wider “risk on” activity for the broader cryptocurrency market has been driven by an easing of the fallout from the collapse of FTX, combined with the ongoing shift in perception for the pace of US interest rate hikes for December and into 2023. This was boosted on Wednesday in a speech from Federal Chairman, Jerome Powell.
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For DOT/USD specifically, the gains in the past week have set up a more bullish technical outlook in at least the short-term. The push today above the latter November swing peak at 5.52 has established a near-term Double Bottom pattern, in relation to the lows at 4.99 and 5.06. This should at least limit downside risks into mid-December and potentially beyond.
Upside Risks and Price Projections
In addition to the short-term Double Bottom pattern, Polkadot is now eying the down trend line that comes from early November off of the swing peaks at 6.17 and 6.05. Above here would reinforce the current short-term base and then encourage further upside progress for price towards chart targets at 5.65 and the peaks themselves at 6.05 and 6.17. Though this higher level would confirm an even stronger and more sustainable base and recovery to possibly target 7.41 and 8.05 through year-end and into Q1 2023.
Downside Threats
A surrenderer of modest support in the 5.32/30 area would open up risk to retest the swing and bear market lows at 5.06/4.99. Below here would see extension risks to targets at 4.44 and even 4.03.
What is Polkadot?
Polkadot is designed as a blockchain to support other blockchains. It allows blockchains that are unconnected to communicate and allows data to transfer securely. Think of the Polkadot crypto platform as a network, made up of other blockchain systems. It is viewed as an eco-friendlier cryptocurrency.
According to the Polkadot site, “Polkadot is built to connect private and consortium chains, public and permissionless networks, oracles, and future technologies that are yet to be created. Polkadot facilitates an internet where independent blockchains can exchange information and transactions in a trustless way via the Polkadot relay chain.”
eToro is a multi-asset investment platform. The value of your investments may go up or down. Your capital is at risk.