Polkadot Price Prediction: Is A Breakout Imminent?

Polkadot (DOT) price showed signs of a potential bullish reversal based on two technical indicators. 

A short-term TD Sequential buy setup appeared on the 4-hour chart, while a long-term triple bottom structure indicated a larger price rally toward $16.93.

With DOT price trading around $3.72, these technical patterns suggested a strong reversal could follow, but only if key resistance levels broke.

TD Sequential Flashed Buy Signal on 4-Hour Chart

Analyst Ali Martinez reported that the TD Sequential indicator flashed a buy setup on DOT 4-hour chart.

This signal came after nine red candles in a row, suggesting the bearish trend may have exhausted.

The TD Sequential is used to detect price reversals and often marks the beginning of new short-term uptrends.

This signal formed while Polkadot price action compressed between $3.50 and $3.75. Such a squeeze can increase the probability of a breakout when momentum returns.

In early 2024, a similar setup led to a 25 percent rally for DOT price in under a week, making this recent signal more notable.

Lower volatility occasionally enhances these reversal signals by showing that a buildup phase may be preceding the directional movement.

Consequently, the current configuration on DOT 4-hour price chart contributed to the overall bullishness in the short-term trend of the asset’s price.

Triple Bottom Pattern Mapped With $16.93 Target

Furthermore, analyst Patron identified a triple bottom structure forming on DOT macro chart.

The pattern recorded three equal lows and up bounces with an intermediate flat neckline at $10.31.

Triple bottoms are the reversed formations that often indicate the end of long-term descending movements.

From this structure, the analyst projected a $16.93 target when confirmed. This target was calculated by measuring the vertical distance from the bottom to the neckline and extending it upward.

If the neckline breaks, Polkadot price could surge over 360% from current levels.

This pattern could be observed on higher timeframe charts like the weekly chart thus making it more reliable.

It is noteworthy that such patterns persist for a long time and affect the market sentiment and prices over a few months when confirmed.

$10.31 Resistance Held the Key for Breakout

Notably, the neckline level of $10.31 had also served as a reversal point for Polkadot price in the past.

In the previous rallies and corrections, the price zone acted both as a support and a resistance level.

For the bullish scenario to come into play, DOT price needed to go above this line and maintain that level.

Polkadot price had failed to reclaim this level multiple times over the past two years. Each rejection corresponded to a new low of this resistance, but it made it that much stronger.

Hence, trading above $10.31 would demand increased volume and corroborating signals from other technical oscillators.

At the time of writing, low trading volume was recorded in the market. Hence there was no confirmation of the breakout without sufficient participation.

However, up to the present time, the triple bottom pattern can be described as technically good but inactive.

On-Chain Metrics Supported Reversal

Additionally, the on-chain data also reflected more optimism towards the possibility of Polkadot price to bounce back.

The data retrieved also showed a reduction of the average supply of DOT kept in exchanges over the duration of 30 days.

This suggested that investors were holding tokens, maybe for a long-term accumulation, thereby limiting the selling pressure.

This showed that the activity growth on Polkadot stayed strong and was among the industry’s highest, as indicated by Santiment.

Nevertheless, there was not much price change, and as the Polkadot team kept on releasing updates, introducing new parachains and new integrations.

These ecosystem advancements could foster long-term investor confidence. However, short-term price action relied more on technical breakout.

The TD Sequential buy setup and the triple bottom formation provided one of the best bullish signals for DOT price in the recent past.