Polkadot is ready for correction to $7 before another spike to a new all-time high

• Polkadot’s DOT is boosted by Binance support.
• DOT may retreat to $7 and $5.5 before another bullish wave.

DOT broke the previous all-time high at $7 and jumped above the next psychological resistance of $8. At the time of writing, DOT is changing hands at $8.1, having gained over 12% on a day-to-day basis. The token sits at 6th place in the global cryptocurrency market rating with the current market capitalization of $7.3 billion.

Polkadot rivals ETH

DOT started breaking up on December 28, after Binance briefly featured the token on its homepage instead of ETH. The Chinese cryptocurrency and blockchain reporter Colin Wu was the first to notice the change. However, soon afterward, the company removed DOT from the Binance APP homepage.

Polkadot is considered as one of the main ETH rivals. The project is heavily financed by Binance. On December 27, the cryptocurrency trading platform announced the creation of a $10 million fund to support the development of Polkadot.

In October 2020, the head of Pantera Capital said that Polkadot had an excellent chance to stop Ethereum’s domination in the industry of decentralized applications.

According to PolkaProject, there are 325 projects currently deployed on Polkadot blockchain, which is over a 30% increase from September levels. 

DOT is ready for a correction

From the technical point of view, DOT broke above the critical resistance of $8. If the upside momentum is sustained, the price may proceed to $10 and potentially $12.

Meanwhile, the TD Sequential indicator is ready to present a sell signal. Currently, it shows a green eight candlestick, meaning that the token may be ripe for a healthy correction. If the signal is confirmed, DOT may retreat towards $7 before the upside is resumed.

DOT, 12-hour chart

On the other hand, if $7 gives way, the sell-off may be extended to the next critical level of $6.1 (November 24 high) and the previous channel resistance of $5.5. If this barrier is verified as a support, the long-term bullish trend will be confirmed.