• DOT forms a double bottom pattern, signaling a potential price rise to $5.
• The $3.90 support area holds key importance for Polkadot’s price direction.
• Bullish divergences in RSI and MACD suggest weakening bearish momentum and potential breakout.

Polkadot (DOT) had a strong start to 2024, reaching a new high of $11.89 in March. Since then, however, the price dropped sharply, almost hitting a new all-time low in August. Recently, though, signs of a potential rebound are emerging. A double bottom pattern is forming, which could push the price back up to $5.

Support Levels Hold Steady

After March’s peak, Polkadot entered a downward spiral, trading inside a descending channel. In August, the price bottomed out at $3.59, finding support near the $3.90 mark. This area has become crucial for Polkadot. If the price dips below $3.90, a new all-time low could be in the cards.

However, a higher low formed in September, offering a glimmer of hope for a recovery. Despite the bounce, technical indicators are still showing bearish signs. The RSI sits below 50, and the MACD remains negative. These factors suggest that the current rally may lack strength.

Double Bottom Pattern Suggests a Bullish Move

Looking at the daily chart, a more optimistic story unfolds. A double bottom pattern is forming around the $3.90 support zone. This is a strong reversal signal, suggesting a potential price increase. The pattern is supported by bullish divergences in the RSI and MACD, which show the bearish momentum weakening.

If this trend continues, the price could rise toward the channel’s resistance line at $5. However, the double bottom offers a short-term outlook. While the pattern indicates a possible rise to $5, the bigger picture depends on whether Polkadot can break out of the descending channel.

A successful breakout could lead to a stronger upward trend. But if the price fails to hold above the support level, another decline may follow. The double bottom pattern in Polkadot’s price action points toward a possible move to $5. A breakout from the long-term descending channel is key to determining whether this rally will continue.

The post Polkadot (DOT) Price Action Points to $5 with Double Bottom Formation appeared first on Crypto News Land.

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