As a researcher with a background in technical and sentiment analysis, I have closely observed Polkadot’s recent price action and market conditions. The asset has faced significant selling pressure at the key resistance region consisting of the 100-day moving average and the crucial $7.4 level.
Recently, Polkadot experienced notable decreased demand around its important resistance zone, which includes the 100-day moving average and the significant price mark of $7.4.
This resistance has led to a potential continuation of the bearish retracement.
Technical Analysis
By Shayan
The Daily Chart
An in-depth analysis of Polkadot’s daily price chart reveals a bearish trend. The price has been turned down after hovering around the important resistance level of $7.4 and the notable 100-day moving average for some time. Selling pressure is prevailing in the market, leading to a likely downtrend towards the $6.5 support level.
In a more expansive perspective, the value of the asset lies between the significant resistance at $7.4 and the supportive level at $6.5. Escaping this boundary could establish a prolonged trend.
The 4-Hour Chart
On the 4-hour chart, Polkadot buyers have failed to break through the significant resistance zone marked by the $7.4 and $7.8 levels based on the 0.5 and 0.618 Fibonacci retracement levels respectively. This has triggered a surge in selling, resulting in a pronounced reversal towards the lower edge of an uptrending wedge, around the $7 price mark.
As a crypto investor, I’m closely watching the current price action. Right now, the price is facing a significant challenge from this strong support level. If sellers manage to push the price below the lower boundary of this wedge formation, then we could see a sharp and impulsive bearish trend unfold, potentially leading us down toward the $6 support region.
In summary, Polkadot is at a critical juncture. A failure to hold current support levels could lead to further declines, while a successful defense might allow for consolidation and potential recovery.
Sentiment Analysis
By Shayan
As a researcher studying the markets, I have found that examining the metrics of futures markets in conjunction with Polkadot’s price fluctuations can be incredibly enlightening for traders. The liquidation heatmap for the DOT/USDT pairing on Binance, as illustrated in the chart, grants us a clear visualization of substantial liquidity pools that have the potential to impact price trends.
At present, Polkadot’s price is fluctuating between a significant price range. The resistance level can be found around $7.4, while support lies at approximately $6.5. Notably, within this range, the levels at $6.9 and $7.2 exhibit the most considerable liquidity in proximity to the current price, as indicated by the heatmap.
Therefore, any breakout from either of these levels could trigger a cascade of liquidations, potentially fueling the move and leading to a breakout from the range. Such a breakout could initiate a sustained trend in the direction of the breakout.
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2024-05-31 16:10