Polkadot Technical Analysis: DOT soars past $5, flipping Chainlink for the 5th spot

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  • Polkadot has, for the first time, made it to the top five with a market cap of $4.56 billion.
  • An increase in buying volume has supported the symmetrical triangle breakout.
  • If the resistance at $5.50 stays put, a reversal could ensue, sabotaging the gains made.

Polkadot has soared into the top five after displacing Chainlink. Data by CoinMarketCap shows DOT with a market cap of $4.56 billion. Polkadot entrance into the top five is not a done deal, considering Chainlink follows with a market cap of $4.51 billion. The question is, can DOT bulls sustain the uptrend?

At the time of writing, Polkadot is trading at $5.36, following an 18% spike over the last 24 hours. Breaking the stubborn resistance at $5.00, paved the way for gains eyeing $10. For now, trading above the seller congestion at $5.5 is the bulls’ priority because it will allow them to shift their focus to $6.00 and $7.00.

DOT/USD 1-hour chart

BTC/USD price chart

Can Polkadot sustain the uptrend?

The recent gains come after the token broke above a symmetrical triangle whose target is $7.00. The breakout was met by increased buying activity, which created enough volume for DOT as it scaled the seller congestion at $5.00.

DOT/USD 4-hour chart

DOT/USD price chart

The Relative Strength Index (RSI) is not yet in the overbought region, which means there is still room for growth. The action above $5.50 would also encourage [more buyers to join the market, in turn, increasing the volume for gains above the next resistance at $6.00 and $7.00.

However, it is essential to anticipate the possibility of the uptrend taking a breather before even taking down the resistance at $5.50. Note that the death-cross impact at $5.37 when the 50 moving average crossed below the longer-term 100 SMA could still affect the price. Therefore, we cannot assume selling pressure is absent.

A reversal from the current price level would first seek support at the 100 MA, the former resistance at $5.00, and the 50 MA. If the losses extend further, expect losses to continue as far as $3.50.

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