Polkadot reverses its losses with a 116% rally

The Polkadot DOT token has been really active in the cryptocurrency market throughout the week, appreciating more than 21%Even though the gains generated more excitement among investors, the token continued to rise and continues to trade at $4.65 with a market cap of over $6.6 billion.

Currently ranked 17th among the largest cryptocurrencies, DOT investors and fans can’t help but wonder if it can maintain its momentum.

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There is literally something floating in the air, especially after the analysis of the popular cryptocurrency analyst known as “Zayk Charts.” The analyst observed a descending wedge pattern on the 2-day chart for DOT/USDT, and it could really be a game-changer.

$POINT Falling wedge formation on 2D time frame✅

In case of escape, the next target will be $10📈#SPOT #DOTUSDT #moles #Cryptocurrencies image.twitter.com/xgqyjAN4ul

— ZAYK Charts (@ZAYKCharts) August 11, 2024

This is usually a bullish signal and has a greater than 70% chance of triggering a negative trend reversal. If DOT breaks out of this wedge, Zayk Charts predicts that it could skyrocket straight up and reach a price of up to $10.

Polkadot’s “greed” factor

While technical analysis looks good for DOT, when we overlay sentiment, it only makes things more complex. Polkadot’s Fear and Greed Index recently turned a “Greed” phase. What does it mean? Simply put, investors are getting excited, perhaps too excited. The “greed” phase usually means that an irrational state is being created in the minds of optimistic investors, where they simply believe that prices are going to go up and never go down.

While it is a great way to make short-term profits, there is a problem: excessive greed inflates prices more than they are actually worth, thus creating a bubble. While the period of “greed” of course puts a strong market performance on the radar, it also brings with it warning signs that indicate a possible market correction. In short, are we facing a bubble or is it just the beginning of a long-term bullish trend?

Technical Analysis: Falling Wedge and Breakout Potential

Coming back to the technical aspect, the Falling Wedge pattern is very important and Zayk Charts marks it as such. Technically, this pattern is known to be a bullish reversal pattern. It is formed when the price of a currency is trading lower but the rate of decline slows down which then results in the formation of a converging trend line. A breakout of this pattern usually results in a massive price surge.

Breaking out of this wedge could be the key to DOT reaching $10, meaning a 116% surge for the altcoin. That would be a huge rally for the cryptocurrency, a move that would easily regain investor confidence and cement Polkadot’s status as a force to be reckoned with within the market once again. However, like any other prediction made in the highly unpredictable world of cryptocurrencies, this too comes with no guarantees.

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Price forecast and investor outlook

In a broader perspective, DOT still holds on to very positive sentiments. According to CoinCheckup data, the DOT token is poised for a increase in strength. The platform predicted that the price would rise by 245% over the next three months.

If such an event were to occur, it would be a huge comeback for the token. But that’s not all. In the next six months, Polkadot is projected to rise by 180%, and in a one-year time frame, it is expected to rise by 166%.

Featured image from Host Merchant Services, chart from TradingView