Will PolkaDot DOT reach the sky this bullrun?
Hello Skyrexians!
Despite the rapid recovery in Bitcoin price after the correction, altcoins remain dead, and we understand that this is really annoying for most market participants. Most traders are now in huge losses after the -60% dump across the entire crypto market since March 2024. But going into cryptocurrency trading is very risky without knowing the various cryptocurrency trading strategies. This time, even the best crypto bot trading strategies and the best crypto traders failed. Nobody expected such a big collapse. Analyzing the ideas of top crypto traders on TradingView, we see that most of them are still optimistic. Of course, this does not mean that the market will definitely go down, but if when it starts to bounce, they remain bullish, it will be a dangerous signal and various trading tools such as automatic trading bots, grid trading bots and other algorithmic trading bots may again face huge losses. In our opinion, only a cryptocurrency trading bot can solve this problem due to the use of a non-linear approach.
In today’s article, we will share with you our DOT analysis that will help you set up a bot algorithm for cryptocurrency trading or trade manually. We hope this will help avoid mistakes and reduce potential losses. Let’s get started!
DOT Macro Overview
There are enough bars in the history of this crypto asset to conduct a complex analysis. This fundamentally strong L0 project was registered in 2020 just before the massive bull rally. The previous wave of the bull run with the highest degree was wave 1. After that, we saw the first sell-off. Some traders may say this is wave 4, but we counted it as wave A within a larger wave 2. Wave B set a bull trap and produced an irregular correction, after which wave C began.
In our opinion, this wave C inside 2 was completed in October 2023 with a massive reversal bar below. This is the strongest signal for the end of a trend. Now a new impulse wave 3 has started. We want you to notice that DOT is an uptrend asset, the price has not yet reached the previous bullish start, and this is a great sign that it has a great chance of setting a new ATH in this cycle.
When talking about potential targets, we can use our favorite Fibonacci extension. The most conservative target is $51 (almost at ATH), probable – $79, incredible – $119. We expect to achieve at least the first goal of $2024-$2025.
Is wave C completed within 2?
Previously, we looked at a bear market as an irregular correction, and the move from the ATH to the bottom was wave C. Wave C usually consists of 5 waves. This time we can clearly count these waves. Divergence Awesome Oscillator helps us count waves. Wave 5 ended with a bullish divergent bar with an MFI squat. Taken together, this is a strong reversal sign.
Diagram 1. Overview of Wave C DOT 1W.
All these statements tell us that a new bull market has begun, let’s try to understand what stage it is at now.
Is there a pump coming soon?
DOT’s base case is for prices to rise in the coming months. As you can see on the chart, wave 1 is complete and the current correction is wave 2 within a new bullish rally.
Chart 2. DOT 1W new bullish rally analysis.
Price has already formed a bullish reversal bar with a squat MFI at a potential bottom. If successful, we believe in quickly reaching the $18 target as a local wave 3. But we are concerned about two facts: the price dropped below 0.618 and remained there for a long time, and the bullish reversal bar has not yet been confirmed by a price breakout. Therefore, we have no right not to consider an alternative scenario.
Alternative scenario – if we are completely wrong
We will consider the scenario where a bear market is simply wave A, which also usually consists of 5 waves. In this case, the growth from October 2023 to March 2024 is just wave B, but how is this possible? On the logarithmic chart, the price did not even reach 0.5. On the regular chart it reached only 0.23.
Diagram 3. Alternative DOT scenario.
It is not similar to wave B in a zigzag correction. This means that such a scenario is unlikely. Moreover, if this scenario is true, then the bull run (wave 1) was much shorter in duration than wave 2.
Is DOT ready for growth?
To answer this question, we need to count the waves within wave 2 of this bullish rally. Let’s look at the price chart below.
Chart 4. DOT 1D timeframe.
We counted the waves as an irregular ABC correction. The wave is already completed with the Awesome Oscillator divergence and bullish reversal bar. Therefore, we expect prices to rise in the coming weeks.
Conclusion
In this article we examined all possible scenarios. We realized that a negative bearish scenario is very unlikely. Establishing a new lower low was only possible if the large wave B was in the shape of a triangle. In this case, it may not roll back as much, but it is definitely not a triangle. We may see a triangle on ATOM, but for DOT it is much more likely that wave 3 of the bullish rally is about to begin. In any case, control your risk, do not invest money that you cannot afford to lose.
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