- Polkadot price is up nearly 10% after breaking out of a bullish pennant pattern.
- The MRI indicator could be the cycle top signal for a moment put off the upswing.
- A bearish scenario could develop if DOT falls below $ 37.5.
Polkadot price has been in turmoil for more than ten days and could take a short break before resuming its upward trend.
The Polkadot Prize is about to take a short break
Polkadot price slipped into consolidation after rising 190% between January 22nd and April 4th. While the initial climb can be viewed as a flagpole, the following one can be viewed as a pennant.
DOT converged between two trend lines that made lower highs and higher lows during the consolidation phase, creating a pennant. The technical formation is a continuation pattern and projects a 63% upswing determined by adding the height of the flagpole to the breakout point at $ 38.
With that in mind, DOT is at $ 62.44, a new all-time high.
From April 2, the polkadot price cut through the upper trend line of the pennant and signaled the beginning of a new uptrend.
Since March 25, the DeFi token has risen by almost 57% and triggered the cycle top signal of the Momentum Reversal Indicator in the form of a red candlestick on the daily chart. This setup predicts a correction of one to four candles.
As such, DOT could see a minor correction towards the immediate demand barrier at $ 42.39 before resuming the uptrend towards the intended target at $ 62.44.
DOT / USD 1-day chart
While things appear bullish on polkadot price, investors need to pay special attention to retracement. If this pullback goes above $ 37.5 it will put the bullish outlook on hold and potentially trigger a bearish outlook.
In such a scenario, panicked investors could sell their holdings and push DOT back into the pennant formation to retest the subsequent demand barrier at $ 33.7, in line with the Fibonacci retracement level of 78.6%.