Polkadot Seen Reversing Losses With 116% Rally

Bitcoin Is Forming A Symmetrical Triangle – Can BTC Reclaim $100K?

Dogecoin Price Breaks Out Of Symmetrical Triangle Pattern, Analyst Puts Target Above $0.37

Polkadot token DOT has indeed been hot on the cryptocurrency market throughout the week, appreciating over 21%. Despite the gains bringing further enthusiasm among the investors, the token pressed on higher and continues to trade at $4.65 with a market capitalization of more than $6.6 billion.

Now ranking 17th in the largest cryptocurrencies, investors and DOT aficionados cannot stop wondering if it can sustain its momentum.

Polkadot ‘Greed’ Factor

While the technical analysis looks good for DOT, when we overlay the sentiment, it only makes things more complex. Polkadot’s Fear and Greed Index recently shifted into a “Greed” phase. What does it mean? In plain words, investors are getting excited—maybe a little too excited. The “Greed” phase usually means that it is creating an irrational stage in bullish investors’ minds, where they just think prices are to go up and never go down.

While being great for short-term gains, there’s a catch. Too much greed inflates prices higher than they are truly worth, hence creating a bubble. While the “Greed” period, of course, introduces on the radar screen strong market performance, it also carries with it red flags toward a possible market correction. In short, would we have to face a bubble, or is it just the beginning of an upward long-term trend?

DOT market cap currently at $6.7 billion. Chart: TradingView.com

Technical Analysis: Falling Wedge And Breakout Potential

Back to the technical front. The falling wedge pattern is very important, and Zayk Charts marks it accordingly. Technically, this pattern is known to be a bullish reversal pattern. It forms when the price of a coin trades lower but with the rate of decline decreasing, which then results in the formation of a converging trend line. A breakout from this pattern usually results in a massive price increase.

Breaking out of this wedge could be the key to $10 for DOT, which means a 116% increase for the altcoin. That would be a huge comeback for the cryptocurrency, a move that would easily regain investors’ confidence and re-cement Polkadot’s status as a force to reckon within the market. Like any other prediction done in the highly unpredictable world of crypto, however, this also comes with no guarantees.