More On: polkadot
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Polka Dot, Cosmos, and Gala Analysis on the 10th of March prices
Polkadot unable to hold above critical support, bulls concerned as DOT could fall 10%
Gavid Wood recently stated that the DOT treasury currently has 18.9 million tokens (equal to $836.9 million at press time) available to spend on ecosystem development.
The fund's announcement came just days before Polkadot's parachain auctions go live in November, possibly to spur development ahead of the highly anticipated event. A new ATH was just around the corner, with the coming weeks looking bullish as DOT trades within an up-channel. DOT was trading at $44.2 at the time of writing, with a market cap of $42.9 billion.
Polkadot Daily Chart
Since beginning an upward trend from $26.3 in late September, DOT has maintained a bullish outlook. On 14 October, an up-channel breakout allowed DOT to reclaim the region above $40 for the first time since the crypto crash on 19 May.
DOT is currently trading near a weak resistance level of $46.4 (not shown), with an upward breakout expected to take it back to its previous ATH of $50. If bulls successfully clear this final hurdle, DOT will proceed to the 138.2 percent and 161.8 percent Fibonacci levels. The 200 percent Fibonacci level was $89.6, but some selling pressure is likely before this target is reached.
In contrast, an unjustified bearish intervention at $50 could cause DOT to revert to near-term support levels of $42 and $38.5. If DOT falls below $33 at any time, its bullish bias would be severely weakened.
Reasoning
Since late September, the DOT's daily RSI has been steadily rising. Based on its current trajectory, the next leg up would see the RSI move deeper into the overbought zone, paving the way for further gains. However, a triple top around 75 could threaten some short-term downside.
Meanwhile, the Directional Movement Index increased in strength every day following the bullish crossover on October 1. Finally, the MACD was trading at its highest level since February 21 but needed to overcome a bearish crossover to continue rising.
Conclusion
Although the near-term trajectory of DOT was uncertain due to an overbought RSI and a bearish crossover on the MACD, the long-term outlook remained strongly bullish. Expect DOT to surpass its previous ATH and set records above the $65 mark prior to the parachain auctions.
