Polkadot (DOT) Forms Traditional Bullish Falling Wedge – Major Breakout Approaching

In a recent update, crypto analyst Jascrypto observed that Polkadot (DOT) is developing a classic bullish falling wedge formation on the daily chart. This technical pattern often indicates a possible trend change, suggesting a conclusion of the downtrend and an impending bullish breakout. As DOT continues to consolidate within the narrowing wedge, attention from market participants is increasing.

This structure implies a potential weakening of bearish momentum, allowing buyers to potentially take over. With expectations for volume to rise during a breakout, this pattern could signify a crucial turning point for DOT, potentially leading to a strong upward movement and initiating a new bullish trend.

Reasons Behind the Bullish Falling Wedge for Polkadot

Recently, Jascrypto pointed out that Polkadot has successfully broken out of a lengthy falling wedge pattern. Falling wedges are generally regarded as reversal signals, and DOT’s breakout indicates that downward pressure could be diminishing following an extended period of consolidation. This shift in structure points to increasing optimism and hints that the asset may be on the verge of a more significant upward movement.

Jascrypto also mentioned that DOT is currently testing the 100-day and 200-day Exponential Moving Averages (EMAs), which are critical technical thresholds often viewed as strong resistance during bearish trends. He noted that a definitive daily close above these EMAs would validate the breakout and indicate a change in market sentiment.

If Polkadot manages to sustain its momentum and closes above these pivotal levels, it could lead to a rally towards the $5.5 to $6.0 range soon. Such a movement would represent a notable recovery for DOT, drawing new bullish interest from investors.

In a less favorable scenario, Jascrypto indicated that Polkadot could potentially drop to around $3.120 in higher timeframes. However, he added that this potential decline could set the stage for a much stronger rebound, driving the price above the $7 level once momentum resumes.

Positive Momentum Indicators – Is DOT Prepared for a Surge?

Momentum indicators are starting to favor bullish sentiment, signaling that Polkadot may be preparing for a significant increase. The 4-hour Relative Strength Index (RSI) has bounced back from oversold conditions and is now hovering near the midpoint of 50. This movement suggests that bearish momentum is subsiding, and buyers may be regaining control.

Additionally, the 4-hour Moving Average Convergence Divergence (MACD) has exhibited a bullish crossover, where the MACD line rises above the signal line. This event often indicates the start of a new uptrend or a halt in prior downward pressure. Together, the RSI’s recovery and the MACD’s bullish indication imply that DOT’s momentum is shifting positively, laying the groundwork for a possible continuation of the breakout if the price action remains robust.