Over the past six days, Polkadot [DOT] appreciated by 82% from $5.2 to post a high at $9.51 and at the time of writing was trading at $8.52. It held the sixth rank on CMC with a market capitalization of $7.58 billion.
DOT 4-4our chart
Source: DOT/USDT on TradingView
The 4-hour chart showed the extraordinary gains made by DOT after breaking past $5.2, a level that DOT lost to the bears in early December, reclaimed in mid-December, and lost once more.
The strong bullish momentum for DOT saw a minor pullback to retest the $8 region as support before another move upward. This momentum hinted at an upside for DOT and a long position could be profitable for traders.
Reasoning
The Relative Strength Index corrected from the overbought region and showed a value of 60 at the time of writing, which was strongly bullish. Analysis of shorter time-frames showed that the $8.25 level has acted as a support to DOT’s dip from $9.5, and the defense and subsequent ascent up the hourly and lower timeframe charts showed bullish momentum was rising once more.
A retest of the $8.5 support is possible, while the psychological $10 would be the first target for bulls and will be a conservative upside target over the next few days. The Fibonacci extension level of 27% lies at $11.57 based on DOT’s move from the $4.58 swing low to the$9.51 swing high.
Positions
Entry: $8.51
Stop-Loss: $7.9
Take-Profit: $10
Risk-to-Reward: 2.44
Conclusion
DOT has seen a brief pullback and re-established bullish momentum on the shorter timeframes while maintaining a healthy upward momentum on longer timeframes. The trading volume post-breakout has been strong and the $8 level has not faced significant pressure. The $8.2 region was defended by bulls and a close above the $8.5 level indicated a further upside was likely for DOT.
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