Polkadot has broken out of a multi-week resistance with a bullish engulfing candle, sparking speculation of a structural shift. However, the breakout remains in progress, and confirmation hinges on DOT holding above $3.75, a zone of high technical confluence.
After several weeks of compression under a historical resistance, Polkadot (DOT) has finally breached the key ceiling with strong momentum. The breakout is developing on the weekly timeframe, adding to its potential significance. At the core of this move is the $3.75 level, a crucial zone that previously acted as resistance and is now being retested as support. If price action holds above this level, DOT could be setting up for a powerful trend reversal.
Key technical points
- Support Reclaimed: The $3.75 level holds strong confluence, previously a ceiling, now key support.
- Weekly Engulfing Candle: A decisive bullish pattern breaking past multi-week resistance.
- Next Major Resistance: $7 high-timeframe resistance is the next major upside target.
From a technical perspective, the breakout is promising but remains incomplete until the weekly candle closes and subsequent candles confirm strength above $3.75. The current structure shows signs of a bullish engulfing pattern, which often leads to continued buying, especially when coupled with a reclaimed support level. However, one concern is volume, which remains below average. For a breakout of this magnitude to be sustained, stronger volume would typically provide firmer confirmation.
Historically, similar breakout patterns on DOT have led to extended rallies, particularly when backed by solid closes above key resistance levels. Should this breakout follow suit, the next logical target is the $7 resistance zone, which previously acted as a ceiling during earlier market cycles.
The $3.75 zone now becomes the battleground between bulls and bears. If DOT can close multiple weekly candles above this level, the recent lows may be confirmed as a deviation, marking a shift toward a new bullish structural phase. This would likely attract additional buying interest and accelerate momentum toward the $7 target.
However, failure to maintain support above $3.75 could invalidate the breakout, trapping long positions and sending DOT back into its prior range.
What to expect in the coming price action:
If DOT can close above $3.75 with strong volume, a sustained rally toward the $7 resistance becomes increasingly probable. Bulls must defend this reclaimed level to preserve the breakout structure. Failure to do so could result in a retracement and nullify the current bullish setup.
