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Polkadot (DOT) Price Breaks Out of Long-Term Resistance, What Next?

The price of Polkadot (DOT) has broken above the long-term resistance zone, reaching a new yearly high. Will this momentum help the DOT price surge even higher?

Long-Term Resistance Breakout

During the week from January 22 to 28, 2024, the price of Polkadot (DOT) bounced back from the 0.5-0.618 Fibonacci retracement support ($5.9-$6.6) of the previous rally (green arrows).

This created a higher low, indicating that the decline from the long-term resistance zone at $9.5 was just a correction within the uptrend.

Indeed, the DOT price has risen since then, breaking above the $9.5 resistance zone last week. The breakout occurred with a large bullish candle and high trading volume, confirming the validity of the breakout.

This week, the price of DOT is confirming the $9.5 level as support.

The weekly RSI (Relative Strength Index) has entered the overbought zone and is trending upward, indicating that the bulls are in control of the market.

Therefore, there is a possibility that the DOT price will successfully flip the $9.5 zone into support and rise by 55.09% to the next long-term resistance zone at $16.

DOT/USDT weekly chart. Source: TradingView

Short-Term Outlook

The 4-hour chart shows that DOT experienced a sharp sell-off after reaching a yearly high of $10.8 on March 5. This caused the price to break below the previous resistance zone at $9.5.

However, this move turned out to be a false breakout (red circle) as the price quickly reclaimed the $9.5 zone. This indicates that the bulls are buying aggressively on minor dips.

Nevertheless, the 4-hour RSI has created a bearish divergence, which commonly occurs before correction phases.

Therefore, the DOT price may correct towards the recent low at $9.7 before resuming its upward movement.

DOT/USDT 4-hourly chart. Source: TradingView

Conclusion

The most likely prospects suggest that the DOT price will continue to rise in the near future. The potential target for this movement is $16.

However, it may undergo a correction to $9.7 before continuing its upward trajectory.

Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.

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