The Polkadot (DOT) price broke out from long- and short-term resistance levels. However, it has yet to confirm its bullish trend reversal.
The Polkadot price had fallen under a descending resistance line since its all-time high of $55.10 in Nov. 2021. The decrease led to a minimum price of $4.22 in Dec. 2022. The descending resistance line stayed intact throughout this entire downward movement.
However, the Polkadot price began 2023 with an upward movement which caused a breakout from the resistance line. At the time of the breakout, the line had been in place for 427 days. Breakout from such long-term structures often lead to significant upward movements and insinuate that the preceding downward trend has ended.
However, in order to confirm its bullish reversal, the DOT price has to reclaim the $6.80 resistance area. The area is crucial since it previously acted as both resistance and support since 2020.
If the Polkadot price successfully breaks out, it could increase to the next resistance at $9.30. If it gets rejected, it could fall to the $4 support area instead.
Similar to the price action, the weekly RSI leans bullish but has not confirmed the bullish reversal. The reason for this is that it broke out from its bearish divergence trend line (black) but has not moved above 50.
Polkadot Price Prediction for Jan Is Bullish
The technical analysis from the daily time frame shows the reason for the ongoing Polkadot price increase. At the end of Dec. 2022, the daily RSI generated bullish divergence (green line) before breaking out from a bearish trend line. Then, it moved above 50. All three of these are considered bullish signs.
On Jan. 14, the DOT token price broke out from a descending wedge pattern, confirming the bullish Polkadot price analysis. While it reached a high of $6.52, the Polkadot price was rejected by the 0.382 Fib retracement resistance level and created a long upper wick (red icon).
Currently, the DOT coin price is at the $5.60 horizontal area, attempting to validate it as support.
If it is successful in doing so, an upward movement (green) toward the $7 resistance area is the most likely Polkadot price prediction for Jan. If the price breaks down, it will likely return to the resistance line of the wedge at $4.50.
Due to the bullish readings from the weekly time frame, the bullish Polkadot price prediction for Jan. is more probable.
To conclude, the most likely DOT price prediction for Jan. is an increase toward the $7 area and a possible breakout. On the other hand, a daily close below $5.60 would suggest that a drop to the previous resistance at $4.50 is expected.
For BeInCrypto’s latest crypto market analysis, click here.
BeInCrypto strives to provide accurate and up-to-date information, but it will not be responsible for any missing facts or inaccurate information. You comply and understand that you should use any of this information at your own risk. Cryptocurrencies are highly volatile financial assets, so research and make your own financial decisions.