Polkadot rises 75% in a week: can DOT reach $20?
DOT’s price is approaching 20, but a pullback cannot be ruled out after a rally of such magnitude
Bitcoin (BTC) has already tracked significant movements this year, but altcoins are catching up. When the price of Bitcoin starts to stabilize, the market environment becomes Bitcoin Revolution better for altcoins, which can start to rise again.
One of the best performing crypto assets in 2021 is Polkadot, which has been making new all-time highs day after day. Since the beginning of the year, Polkadot’s price has risen 85%, and 75% in the last seven days, surpassing XRP in market capitalisation.
Polkadot’s daily chart shows a rounded bottom structure during the last quarter of 2020. Since then, a fantastic support/resistance reversal has occurred at the $4.55 level, leading to further growth.
This bullish continuation started with a huge rally towards $10, at the end of which the demand (grey rectangle) protected the support and new levels were defined using the Fibonacci extension.
One of these regions is between $14.25 and $14.75, while the second is between $16 and $17, as the chart shows.
At the moment, the crucial question is whether DOT has ended its rise. If so, the areas of interest for support/resistance reversals are at the Fibonacci levels 0.35-0.382 and 0.618-0.65.
These Fibonacci levels are often used to predict where corrections will potentially reverse course. In the case of Polkadot, they largely correspond to previous support or resistance levels, specifically the areas around $13 and $10.50. Traders should target these areas for potential buying opportunities.
In all likelihood, Polkadot will only track a correction when Bitcoin begins to collapse. Otherwise, Polkadot and many other altcoins are currently in a good position for further upside.
However, if the correction occurs and Polkadot finds a low, new points of interest may be defined on the charts for the next momentum move. In that case, Polkadot, could continue its rally towards $23-$24 and possibly even to $32-$35 later in the year.
DOT/BTC approaches a critical resistance zone
The daily chart of Polkadot in the exchange rate with BTC shows a huge increase in the last few days. However, this movement is approaching a significant resistance zone.
It is logical and should be obvious, but it is not advisable to open a position just as the price reaches a resistance zone.
Breaking the range between 0.00045000 and 0.00047000 sat is crucial to trigger another strong impulse move upwards. If this area is broken and turned into support, Polkadot could enter a new phase of price discovery.
However, the price is more likely to be rejected at this level. In this scenario, a healthy correction is possible and traders should target the region around 0.00035000 sat, but also in the range between 0.00031500 and 0.00032250 sat.
The 2-hour chart shows a strong uptrend, but some critical levels must hold to allow it to continue. Therefore, the previous high at $15 must hold support. If this area holds, a new rally towards $20 and above is possible for Polkadot.
On the contrary, if the support of $15 is broken, a potential major correction will take place. The next support zones are at $12 and between $10.75 and $11.25: a contraction of 30-40%.