Polkadot (DOT) nautical chart technicals suggest it may rally to a new record high near $75 if DOT tin can manage to close above its $41–$43 range decisively.

That'southward co-ordinate to a classic bullish reversal setup known as an inverse head and shoulders (H&S) that forms when the price undergoes iii selloffs during a flow of market consolidation.

Specifically, the pattern contains an initial selloff, followed past a short-term price rally and another — deeper — selloff. That leads to one more modest correction to the upside, followed by another selloff that bottoms out most/at the lowest level of the first selloff.

Changed head and shoulders blueprint illustration. Source: ThinkMarkets

The get-go and concluding selloffs represent "left" and "right" shoulders, respectively, while the 2nd selloff represents the "head." On the other paw, the level around which all the short-lived rallies acme out represents the "neckline" of the caput and shoulders pattern.

Traditional analysts typically summate the H&S upside target from the neckline resistance past measuring the maximum distance between it and the head formation.

And so, it appears that Polkadot has been forming a similar bullish pattern on its weekly nautical chart, as shown below.

DOT/USD weekly toll nautical chart featuring inverse head and shoulders setup. Source: TradingView

The maximum distance between DOT'due south neckline and the head's lesser comes out to be nearly $31. Therefore, a successful bullish breakout above the neckline range of $41–$43 puts the next long-term target at approximately $75.

Parachain auctions coming in November

The inverse H&S design emerged as DOT rallied by almost thirty% this past week to reach a five-month high at around $44. At the cadre of its weekly uptrend was a price boom beyond the crypto market, as well every bit the news of Polkadot'due south first parachain auctions going live on Nov. eleven.

In detail, Polkadot's parachains are parallelized, application-specific chains — child ledgers tethered to a single parent ledger called the Relay Chain. Due to their parallel nature, parachains tend to process multiple transactions simultaneously and maintain and record their data on the main ledger past communicating with other bondage.

Related: Polkadot to debut parachain auctions after governance vote

That comes as a break from the method of queuing transactions and processing them sequentially.

DOT, which serves as a utility token for fees, governance, interoperability and bonding inside the Polkadot ecosystem, rallied by more than 24% after the parachain auction announcement.

Side by side, Polkadot aims to introduce a cantankerous-concatenation feature that will enable its Relay Chain to external blockchains (Bitcoin, Ethereum, etc.) via specialized smart contracts. Meanwhile, the project also plans to launch "in-built bridging modules" that will enhance the interoperability of external blockchains with Polkadot.

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