- Polkadot price popped higher on Tuesday after bulls limited losses to near zero on Monday.
- DOT price enjoys some tailwinds from markets applauding support packages in Europe.
- Expect to see another little pop higher, but a double cap is nearby and will probably trigger an early fade.
Polkadot (DOT) price is set to book 6% gains intraday as tailwinds emerge on Tuesday. Markets have digested Europe’s rescue package for the energy sector and are seeing a silver lining, together with additional measures out of Germany, that has said it will delay phasing out its nuclear power plants so as to meet energy demand over the winter. Additionally, the wild ride in Ethereum price just hours before its network update and launch of v2 is helping to lift morale in cryptocurrencies overall.
DOT price enjoys a lift in morale
Polkadot price has hopes of continuing its small uptrend that began at the end of August, with a supportive trend line forming over the past three trading days. Multiple firm tests have confirmed support is present, and a squeeze to the upside is potentially in the offing as a bullish triangle has formed with the monthly pivot as a baseline. That said,, nothing has changed fundamentally since the current market environment is very negative, and Polkadot is still in an overall downtrend.
DOT price could still, nevertheless, push higher and even break above the monthly pivot and the 55-day Simple Moving Average (SMA) at $7.83. Such a breakout, however, has the risk of being a false breakout and turning into a bull trap. Once $8 is hit, expect to see a sharp fade that could go so deep that even the green ascending trend line might start to break and not hold any support anymore.
DOT/USD Daily chart
Of course, it could well be that some positive elements emerge as the news out of Ukraine starts to die down. This opens up some room for a deflation of the tail risks weighing on DOT price and seeing more room for upside. That would translate into DOT price climbing above $8 and possibly going to $9 near the monthly R1 resistance level.
