Polkadot goes ballistic soaring 40% as technical levels improve
- Polkadot rises above the crypto horizon with gains almost hitting $12.
- DOT trading volume soars massively but coupled with overbought conditions hint at an imminent reversal.
Polkadot has been teasing a breakout since the beginning of the week and after the slump in prices across the cryptocurrency market on Monday. The token embraced support at $7, which allowed a rebound within the confines of a descending parallel channel.
The ultimate test came at the channel’s upper boundary where DOT swung massively upwards. The 50 Simple Moving Average on the 4-hour chart did little to stop the momentum. Polkadot swung upwards in successive bullish candlesticks, even overshadowing Bitcoin’s recovery above $37,000.
Several resistance levels have shattered, including $10 and $11. Polkadot is on the way to breaking above the next hurdle at $12, a move that could see it taken on higher hurdles toward $15.
DOT/USD 4-hour chart
The Relative Strength Index has entered the overbought region, calling for caution among the traders. An asset can continue rallying despite overbought conditions but corrections are very likely and could be drastic.
For now, establishing higher support should be a priority to the bulls. Notably, Santiment shows Polkadot’s volume has risen to levels seen at the beginning of the year. A high trading volume is often unsustainable and sometimes interpreted as a bearish signal.
In case of a correction, Polkadot is likely to find support at $10 (former resistance). The 50 SMA is in line to provide more anchorage if losses extend toward $9. If push comes to shove, the 100 SMA marginally under $9 and perhaps the descending channel’s upper trendline will come in handy.
Polkadot intraday levels
Spot rate: $11.52
Relative change: 055
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