Polkadot Springs From Wyckoff Accumulation as ADX Signals Trend Awakening
Market Structure Shifts Higher
- Wyckoff Spring pattern at $2.69 confirmed accumulation phase.
- ADX climbed above 30, indicating trending conditions.
- Emergency support at $2.32 remains intact despite a 36% decline.
The textbook Wyckoff Spring pattern on DOT’s daily chart at $2.69 confirmed the accumulation phase that has been underway since June. The tide may be turning in favor of the bulls on the daily timeframe as the ADX just climbed above 30, indicating that the market has shifted from consolidative to trending conditions. The first emergency support also remains holding at $2.32 despite a 36% decline posted over the month.
The question of whether Polkadot is gearing up for a trend reversal or another leg down is on the mind of most traders. As a prudent investor in today’s volatile trading environment, it’s a good idea to analyze both bullish and bearish thesis. On the bearish side, the fluctuations and volatility in the broader market cap weighted cryptocurrency markets, the altcoin scheme that fundamentally relies on the success of Ethereum and the forthcoming launch of Ethereum 2.0, may not be so predisposed to serving the DOT token well in these already bearish conditions.
| Metric | Value |
|---|---|
| Asset | POLKADOT (DOT) |
| Current Price | $2.32 |
| Weekly Performance | -18.02% |
| Monthly Performance | -22.67% |
| RSI (Relative Strength Index) | 31.4 |
| ADX (Average Directional Index) | 32.9 |
| MACD (MACD Level) | -0.19 |
| CCI (Commodity Channel Index, 20-period) | -127.29 |
Momentum Exhaustion Signals Capitulation Complete at 31.40
The Relative Strength Index (RSI) is at 31.40 on the daily timeframe which indicates the first decline into the oversold area since the August washout that was followed by a 40% relief rally. It is interesting to note that momentum indicators hardly registered the effect of the loss despite the price decrease of another 18% this week. This is a classic divergence that usually indicates the demand for the step. The weekly RSI reading of 34.58 confirms multi-timeframe oversold conditions. These setups last time before September .6 .动态 from .50 .5 .20.
Therefore, for those curious of the blockchain energy sector, the company’s website may provide some additional insights into the business approach and progress. What is the forecast for the stock? Following the news, the stock jumped above resistance at the 8 cents level, but remains a long way away from the aforementioned major resistance levels.
ADX at 32.89 Confirms Trend Strength Building From Wyckoff Spring
When price began its advance above $3.30, speculative interest jumped back in fueled by the release of the milestone 1.5.0 engine upgrade and surge in demand deposits. With more than 75% of DFI’s maximum supply now staked/locked up, the remaining circulating tokens available for trading are diminishing exponentially. Ironically, despite our deep social metrics showing positive development across the board, the coin’s Monetary Policy sparks such extreme FOMO that many claim DFI is now overvalued. We find the complacent inclination that “well I missed another boat” rather amusing. The game hasn’t even started.
The timing is perfect as enterprise demand rotates towards blockchain interoperability solutions giving fundamental wind to the sails at the same time as technical conditions ripen. Hence, trend followers may want to adapt their strategy from range-trading and instead follow the momentum as the ADX indicates this rally has legs beyond a typical oversold bounce.
20-Day EMA at $2.84 Becomes First Major Resistance After Spring Completion
The price is below the EMA ribbon, and resistance is between the 10-day ($2.57) and 20-day ($2.84) moving averages. The 50-day EMA at $3.04 is the battle bulls must win to prove the Wyckoff markup has started. The most noteworthy aspect is the super-tight compression between the 100-day ($3.36) and 200-day ($3.76); this MAs squeeze hasn’t been this tight since the accumulation that preluded the 150% rally in March 2023.
Importantly, the previous support at $2.84 now turns into the initial resistance that bulls need to overcome to confirm a successful Spring pattern. If $2.32 holds, which it has done in the face of multiple tests this week, then it appears that accumulation is taking place, with each subsequent bounce from this level creating a higher low. The announcement of Acurast’s $11M raise, in which the Polkadot founder participated, will reinforce the ecosystem story and possibly lure new money to the aforementioned resistance levels.
Spring Support at $2.32 Holds as Resistance Stacks From $2.84 to $3.56
There are several areas with resistance congestion above the current trading price. The initial resistance zone runs from the 20-day Exponential Moving Average (EMA) at $2.84 to the various psychological resistance of $3.00. This is followed by the December breakout point at $3.56. This barrier level is expected to prevent the northward movement of bulls. The resistance congestion zones above can be drawn starting at the monthly pivot point resistance of $2.87.
Backing up current base-building from the decisive $2.32 level is the monthly S1 at $2.17 (where we bottomed last month) and then $2.00. This zone represents a strong value/buying area before the uptrend continues. The sharemarket is a forward-looking, dynamically adjusting discounting mechanism. Buyers and sellers are constantly assessing all known and anticipated factors and adjusting their risk/reward expectations and capital allocations accordingly.
Enjoy the show!
Bulls Target $3.56 Breakout to Confirm Wyckoff Markup Phase
Buyers’ goal is a breakaway gap on heavy volume above the 200-day EMA, necessitating a close above $4.0 psychological resistance. Sellers are focused on a new low print below the $3.26 flush, so buyers may not even get a second test of primary resistance.
If the price falls below the support of $2.32 on a significant volume, the Spring pattern will not be relevant and traders who entered the market recently will be stuck. In this case, the price will likely decrease to $2, and if this level is breached, it may push the price further down to $1.75. This is the area where the 2022 accumulation zone supported the price.
Considering the trend confirmation by ADX, the oversold RSI bounce setup, and the fundamental catalysts surrounding governance upgrades and enterprise adoption trends, DOT is likely to grind higher and breach the $2.84-$3.04 resistance cluster over the end of the month before this positive momentum brings in new investors to launch a real breakout.
