Polkadot Seen Reversing Losses With 116% Rally

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 many investors, the token pressed on higher and continues to trade at $4.65 with a market capitalization of greater than $6.6 billion.

Now rating seventeenth in the most important cryptocurrencies, investors and DOT aficionados cannot stop wondering if it will probably sustain its momentum.

Polkadot ‘Greed’ Factor

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

DOT in Greed territory. Source: CFGI

While being great for short-term gains, there’s a catch. An excessive amount of greed inflates prices higher than they’re truly price, hence making a bubble. While the “Greed” period, in fact, introduces on the radar screen strong market performance, it also carries with it red flags toward a possible market correction. Briefly, would we have now to face a bubble, or is it just the start of an upward long-term trend?

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

Technical Evaluation: Falling Wedge And Breakout Potential

Back to the technical front. The falling wedge pattern could be very essential, and Zayk Charts marks it accordingly. Technically, this pattern is thought to be a bullish reversal pattern. It forms when the value of a coin trades lower but with the speed of decline decreasing, which then ends in the formation of a converging trend line. A breakout from this pattern often ends in a large price increase.

Breaking out of this wedge might be the important thing to $10 for DOT, which suggests a 116% increase for the altcoin. That may be an enormous comeback for the cryptocurrency, a move that will easily regain investors’ confidence and re-cement Polkadot’s status as a force to reckon inside the market. Like all other prediction done within the highly unpredictable world of crypto, nonetheless, this also comes with no guarantees.

Source: CoinCheckup