Polkadot Wyckoff Spring Propels Recovery as DOT Tests Critical EMA Resistance at $2.97
Market Structure Shifts Higher
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The recent history is positive, though, since the 50 loyal-weekly exponential moving average (EMA) repelled a similar attack just last week. Six days remain for DOT to attempt the feat once more, but should the moving average rather repel price again, the equidistant confluence support zone we identified last week between $2.62 and $2.57 will remain untested. If bulls can strike another offensive before that potential support expires, retest the EMA as resistance on a second time-frame closing basis and unlock a third 120-day percentage range from (theoretical) all-time highs. If they can’t, a fresh zone awaits between $2.62 and $2.57 all the same.
| Metric | Value |
|---|---|
| Asset | POLKADOT (DOT) |
| Current Price | $2.78 |
| Weekly Performance | -4.79% |
| Monthly Performance | -10.03% |
| RSI (Relative Strength Index) | 43.9 |
| ADX (Average Directional Index) | 29.9 |
| MACD (MACD Level) | -0.11 |
| CCI (Commodity Channel Index, 20-period) | -43.20 |
RSI at 46.02 Confirms Accumulation Zone After December Capitulation
The Relative Strength Index (RSI) on the daily timeframe sits at 46.02, which is notably a very strong recovery from the oversold levels that plagued DOT throughout December’s brutal selloff. What’s interesting is how the oscillator acted throughout the entire Wyckoff spring phase; it simply refused to make new lows even as price tested $2.69, thus creating hidden bullish divergence for the observant trader. This momentum reset from extreme oversold levels to the neutral territory often leads to more powerful moves as sellers become exhausted and buyers feel more confident.
When we look back in history, similar RSI recoveries from sub-30 to the mid-40s happened in mid-September and early November before 25-30% rallies materialized. The difference this time? The Wyckoff accumulation structure creates a much more solid base as it implies the lows were actively defended by institutions, as opposed to simply waiting for oversold bounces. So for swing traders, the balanced RSI could be read as there’s fuel in the tank for upside continuation, but also room to fall if the spring fails to launch.
ADX at 29.86 Signals Genuine Trend Strength Building From Accumulation
At 29.86, the ADX entry signal states that DOT has now moved from the “accumulation, chop” phase of December into a bonafide trending environment. Being in this zone, above 25 but below 40, says that the “early markup” phase of the Wyckoff cycle is beginning to stick – it’s no longer sideways noise, but it’s not yet over-extended. The transition from mid 20s ADX readings during the spring cause to almost 30 confirms that the buyers are not simply “defending” support, but are buying with greater conviction.
In other words, the ADX suggests that we are starting to move from the type of state where the boundary-scanning trades prevailed, to the type of state where the momentum contingents can take over. Luckily for those of you looking to take a more unhedged directional bias, the Bybit staking integration has brought in new yield-seeking capital right as the technical landscape is turning more conducive to one-way price movement. With that said, day traders should adapt and perhaps focus on pullback-style entries rather than fading the extrema as trends begin to develop.
EMA Convergence at $2.97 Creates Make-or-Break Resistance Cluster
The price must rip through these EMAs in quick order to keep the momentum of the uptrend still holding at this point. Conversely, the latest swing low (and a break of the 30-day MA) at $2.72 will give the spring naysayers fuel to argue that it’s gonna be an uphill battle back into wide range. If that occurs, a retest of the $2.52 level will likely coincide with a sweep of another stop run trigger and a full retracement of December’s advance.
More importantly, long-term averages are in a better position to gauge a rally’s underpinnings. The 50-week SMA rests at $3.18 and 100-week at $3.39. Week over week, each of these continues to tick lower. Two and a half years of downtrend can’t be erased in two and a half weeks. Bulls need time, but most of all, they need sustained price and elevated volume. No shortcuts.
$3.14 Monthly Pivot Anchors Resistance While $2.69 Spring Low Holds Fort
There is short-term support supplied by the 20-day EMA at $2.71, followed by a cluster of recent swing highs in the $2.60 vicinity. The simple 50-day moving average comes in slightly below that at $2.56 as of the 19th. Versatile support is then offered in the form of the confluence between the 200-day EMA at $2.46 and the 400-day EMA at $2.42. A violation of both the moving averages and the common stochastic floor at $2.27 would likely catalyze further downside momentum.
Looking back on the 2015 range lows, the monthly S1 and 1.618 extensions converged perfectly at $1.46, while a similar confluence this time would point to $2.11 (monthly S1) and $1.86 (1.618). It’s also worth noting the former Wyckoff accumulation range highs would also act as strong support resistance near $1.50.
Importantly, the market structure indicates that accumulation is turning into markup as long as DOT remains above $2.69 on any retrace. A Wyckoff pattern’s completion, a Bybit staking catalyst, and strengthening indicators provide a cluster of reasons to be bullish – but it’s all predicated upon breaking that EMA cluster to the upside.
Breaking $2.97 Opens Path to $3.53 While Spring Support Defines Risk
The buyers must step in and take control driving GRT above EMA resistance located at $2.97 to confirm a bullish market structure. If this level is cleared with conviction the implied measured move of the range lows targets $3.53. Confluence of a key resistance point and previous support turned resistance will provide a stiff test. The Bybit On-Chain Earn feature provides fundamental support acting as a source of relentless accumulation for yield farmers.
If the price is unable to hold the $2.69 spring low on a retest, the bearish scenario comes into play, and the recent accumulation buyers get trapped as the price heads to the $2.11 monthly Sl pivot, down another 22% !!!! This would also mean the whole Wyckoff structure gets invalidated and our accumulation read was too early.
Considering what’s bolted on the right-hand-side of the chart, that could be a good spot to provide the last pullback entry window with decent liquidity up to $2.80 to get Long exposure.
