Polkadot (DOT) initiated a fresh decrease during the week after testing the $7 level as resistance. It formed a triangle pattern and now driving towards its lower boundary for support. The price is currently down by 3% today.

After witnessing a steady recovery in the past month, Polkadot lost momentum again and rolled over due to the sell-off that hit the market in mid-week. The price is still dropping but is likely to stop soon.

This recovery, which started early this year, has facilitated several highs and lows, bringing the price to a tight angle of the symmetrical triangle. 

Just as experienced last month, DOT’s price may come with a quick bounce in the next leg up. But due to the tight trading area, the volatility may keep dropping till next month before breaking out of the triangle. The range to watch around the angle is between $6.1 and $6.6.

However, the last time the price corrected like this was during Q1 when the price fell from $7.9 to $5.18 within the space of a month – it eventually recovered. DOT currently follows the same pattern inside the triangle. We can expect a bounce once the price tests that support.

A break below this triangle will result in a severe loss and that could drag the price back to the March low in no time. If a breakup occurs, the key target would be February’s high before rallying to $9 next. For now, DOT remains Neutral-Bullish.

There’s nothing much until the price breaks away from the triangle. The closest level to watch for a breakup is $7 and $7.4.

For a breakdown, the target support levels to pay attention to are $5.76 and $5.5 before it extends bearishness to $4.72 in the next leg down.

Key Resistance Levels: $6.6, $7, $7.4

Key Support Levels: $5.76, $5.18, $4.72

Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.

Image Source: valedol/123RF // Image Effects by Colorcinch

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