Polkadot’s (DOT) price has reached new all-time highs as it broke out its sideways trading pattern. The cryptocurrency is currently eyeing the $20 level, and is trading just under it. Is this a good time to buy some DOT?
Fundamental analysis: steady fundamentals strengthened DOT’s bullish sentiment
The fourth-largest cryptocurrency by market capitalization reached new all-time highs in recent hours as its price broke out of the sideways trading pattern and passed the $19.4 resistance level. The reason for the push was mostly technical, while Polkadot’s fundamentals are steady and strong. However, there were no recent news that sparked up this push.
Are you looking for fast-news, hot-tips and market analysis?
Sign-up for the Invezz newsletter, today.
Polkadot is known for being one of the most decentralized cryptocurrencies. It is an open-source sharding multichain protocol used to facilitate the cross-chain transfer of any form of data or asset types. This makes it interoperable with a wide range of blockchains, as well as with each other.
Taking a look at the weekly performance, DOT managed to post gains of 26.99% when compared to its position a week ago. This price gain outperformed BTC’s gain of 22.56% over the same period, but fell behind ETH‘s 30.99% gain. At the time of writing, DOT is trading for $19.56, representing a 80.41% gain compared to last month. The fourth-largest cryptocurrency by market cap’s current market value sits at $17.82 billion.
DOT/USD technical analysis: DOT breaks out of the consolidation phase, pushes towards $20
Polkadot was trading in a sideways fashion from mid-January when it entered the consolidation phase after reaching an all-time high of $19.4. The cryptocurrency tested the 21-day EMA and the support Fib retracement levels multiple times in recent days, and held above them. Wednesday trading session started off slow, but gained momentum as DOT managed to find support in its 23.6% Fib retracement, causing even more bullish momentum to enter the market.
DOT is currently trying to pass the $19.4 level with conviction, and while the daily chart shows bull conviction, the cryptocurrency will have to close its daily candle above the previous all-time high to remain as bullish as it is now.
Polkadot’s daily RSI indicator is was sloping down ever since its high in mid-January, but has changed its trajectory in the recent days. DOT’s RSI value is currently sitting at 67.36.
Zooming in to the hourly timeframe, we can see DOT’s price following the 21-hour EMA for the entirety of Tuesday, only to gain insane amounts of volume and bull presence which made it push towards (and past) the previous $19.4 high. DOT’s price is currently retesting the level, and if bulls confirm their spot above the recent high, we may expect a continuation of the push and a DOT price of above $20.
While DOT’s descending volume might be a natural occurrence when retesting a previously-passed level, it also may be bulls reaching exhaustion. The next couple of hours will show what will happen, with the pivot point of $19.4 being the crucial short-term price level.