Polkadot Price Forecast: DOT flashing Buy Signals but Is It the Right Time to Buy?

Polkadot bulls are nurturing a potential breakout after spiking above a short term triangle pattern. DOT/USD drastic price action is delayed by the resistance at the 50 SMA. Polkadot broke down from the ascending channel, discussed last week. Luckily, support at $4.00 came in handy, preventing acute declines from taking over. A reversal, therefore, ensued

Sep 10, 2020 - 14:42

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Polkadot Price Forecast: DOT flashing Buy Signals but Is It the Right Time to Buy?

Polkadot bulls are nurturing a potential breakout after spiking above a short term triangle pattern.
DOT/USD drastic price action is delayed by the resistance at the 50 SMA.

Polkadot broke down from the ascending channel, discussed last week. Luckily, support at $4.00 came in handy, preventing acute declines from taking over. A reversal, therefore, ensued with buyers increasing their entries. A break above both the 50 Simple Moving Average (SMA) and the 100 SMA in the 1-hour chart encouraged the bulls to increase their entries in anticipation of a rally towards $5.00. At the time of writing, DOT/USD is dancing at $4.80 amid a struggle to overcome the short term resistance at $5.00.

DOT/USD 1-hour chart

The 4-hour chart, prints a bullish picture for DOT/USD, especially after a breakout above a falling triangle pattern. Triangle patterns are some of the most common technical analysis tools. They help the traders predict a change from the prevailing trend and the extent to which the new trend can reach. In this case, the triangle breakout is likely to catapult DOT above $5.00.

DOT/USD 4-hour chart

Subsequently, a break above the resistance at the 50 SMA would boost the price farther north. According to the Relative Strength Index (RSI), the uptrend is strong enough for a break above $5.00 in the near term. It t seems lack of enough volume is holding Dot from making a drastic spike. In other words, many are not believing that Polkadot is set for that significant move. This is most likely to invalidate the buy signal. Therefore, is it essential to hold on for a confirmed breakout, especially past the 50 SMA, before going all-in on DOT.