Polkadot looked solid since commencing an uptrend during end-September. With a percentage rise of 80% over the last 30 days, DOT just needed to record an additional 17% increase to tag its May ATH.
However, a broader market correction combined with red flags on the MACD and RSI suggested some sideways action before DOT breaks above its immediate price ceiling at $46.3. At the time of writing, DOT traded at $42.3, up by a marginal 0.2% over the last 24 hours.
Polkadot Daily Chart
A quick glance at DOT’s daily chart suggested that the alt just needed to overturn its immediate resistance at $46.3 to bag a fresh ATH above the $50-mark. Considering the fact that healthy buy volumes have constantly pushed DOT by nearly 80% during September, such a feat would not be difficult to achieve.
However, near-term jitters caused by a bearish crossover along the MACD could delay the eventual breakout for a few more days. An established support at $40 would look to deny any extended drawdowns and allow DOT to maintain its bullish-bias.
Now a closer inspection of the daily RSI revealed that a downwards sloping trendline was now overturned, marking a possible shift in momentum towards the sellers. Should the RSI weaken further below 45, DOT would keep to immediate support, with $38.7 and $36.8 as additional defenses.
Meanwhile, the Directional Movement Index would keep sellers in check. The +DI line still traded above the -DI line- a reading which could dissuade some sellers from betting against DOT.
Once DOT breaks above its previous ATH, the 138.2% Fibonacci Extension ($64.7) can be challenged immediately. The 161.8% ($74) and 200% ($89) Fibonacci Extension levels can be tested following a correctional period.
Over the near-term, DOT could remain fixed within the channel $46.3 and $40 due to bearish developments on the MACD and RSI. Once downwards pressure fizzles out, expect DOT to make way towards the 138.2% Fibonacci extension once the price breaks above $46.3 on strong volumes.