Polkadot price has continued to display its leadership as an outperformer in the altcoin market. However, because it has made new all-time highs, it has entered into price discovery mode, which means the highs are unknown until market participants establish them. But buyers should be on the lookout for any weakness or drop in momentum for a steep pullback. Polkadot price action has pulled back somewhat since reaching a new historical high of $54.25. The whipsaws in price action are readily observed on the Point and Figure chart below. One positive outcome of the indecision in the short-term price swings is developing one of two bullish patterns in Point and Figure: the Bear Trap or the Bearish Fakeout.

BULLISH AND BEARISH CONDITIONS/ POSSIBILITIES :

Currently, Polkadot price is already positioned to confirm a Bear Trap pattern. This will occur if a new column of X's forms and hits the entry. The hypothetical long trade is a buy stop at $53.00, a stop loss at $52.00 and a profit target at $60.00. However, if one more O forms in the current column of Os and the news X column hits the entry, that would confirm the Bearish Fakeout pattern. The theoretical long trade setup will be invalidated if Polkadot price drops to $50.50. If that occurs, the subsequent support level buyers will be looking at is the 38.2% Fibonacci retracement at $49 or the 50% Fibonacci retracement at $47.50.If DOT retraces and sees a spike in selling pressure, the token may drop toward the lower boundary of the governing technical pattern at $39.94, before falling lower toward the 50-day SMA at $36.71, then toward the 61.8% Fibonacci retracement level at $35.79.

Polkadot breaking record highs

Nov 05 2021