After a technical breakout, the Polkadot price gained 20% in two days. As we approach the next big level, the price is starting to look a little stretched.
Polkadot coin (DOT) has staged a remarkable recovery from its sell-off earlier in the week. The Polkadot price suffered miserably, as did many of its peers after Elon Musk rattled the market.
The coin dropped hard but found buyers close to the $30.000 mark. Subsequently, it rallied 57% from its 13th of May of $31.9520.
The current $48.5000 is just short of the new all-time high of $49.9598, set earlier today.
Polkadot Background
The DOT token is native to the Polkadot protocol. Polkadot is an open-source sharding multichain tool. Its functionality allows the transfer of assets and information across multiple blockchains. Therefore making the chains interoperable.
The founders include Dr. Gavin Wood, who is also a co-founder of Ethereum.
The Polkadot price rally puts the coin at number 8 on the CoinMarketCap ranking system. It currently has a market cap of $45.25 Billion.
Technical Outlook.
The 2-Hour chart shows that the Polkadot price broke through the resistance of a descending trend, in place from the previous $48.8220 ATH.
Once the price crossed the threshold at $41.9200, it accelerated higher. The follow-through extension saw the price coin gain close to 20%, as momentum buyers jumped on the move.
The price is now approaching a longer-term trend line at $52.0000. This links two previous all-time highs; therefore, I consider it a strong resistance area.
The RSI is near overbought territory in the 1-hour time frame. This may suggest that the Polkadot price may struggle to clear resistance the first time around.
If the price can clear resistance, buyers may again chase the market higher, leading to an extension in price.
If the current momentum doesn’t take out the resistance, the Polkadot price looks vulnerable to moving back to the $41.9200 breakout line. A break of which would signal that the current bullish stance no longer valid.
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Polkadot Price 4-Hour Chart
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