The price of Polkadot has dropped noticeably and currently hovers near the important level of $6. Its price movements suggest that volatility is minimal at this time.
Yet it’s important to mention that the value of the cryptocurrency is currently stuck between significant levels, potentially signaling an upcoming price surge.
Polkadot Price Analysis: Technicals
By Shayan
The Daily Chart
A closer look at the daily price chart uncovers a quiet trading period around the $6 level after a significant decline beneath both the 100-day and 200-day moving averages. This trend indicates a dominant bearish market feeling, as sellers are currently driving the prices down.
Currently, Polkadot is situated between a crucial support level and a significant moving average. Specifically, it’s at $6 for support and $6.93 for the 200-day moving average.
If the stock price rises significantly above its 200-day moving average, it could lead to a prolonged upward trend towards the significant $10 mark. On the other hand, if the downward trend continues, the stock may head towards the strong support level of $5.
The 4-Hour Chart
After a substantial drop in price caused by a major long squeeze, the 4-hour chart reveals that buying pressure grew stronger as the market trended downwards, resulting in a small recovery around the important $6 mark.
Additionally, when the RSI (Relative Strength Index) line on the 4-hour chart doesn’t follow the same trend as the price, this is known as a bullish divergence. This occurrence may indicate that DOT could experience short-term corrections. In such cases, it’s likely for DOT to continue its corrective phase, and potential levels for these corrections can be found within the price range of $7.4 (0.5 Fibonacci level) and $7.8 (0.618 Fibonacci level).
Polkadot currently lies between $6 and $9 in its larger context, and it’s predicted to keep bouncing back and forth within this price range before a significant move takes place.
Sentiment Analysis
By Shayan
In recent times, the futures market for crypto has significantly impacted price movements. When this market gets too heated with an abundance of buy and sell orders, it can lead to increased volatility and unexpected price fluctuations. Therefore, keeping an eye on the state of the futures market is essential in anticipating future trends.
An essential indicator for assessing Polkadot’s performance is its Open Interest (OI) chart. This tool records the market sentiment and price fluctuations in the futures market. It measures the quantity of active perpetual futures contracts on multiple crypto exchanges. Generally, larger OI figures indicate heightened volatility, while smaller values suggest more tranquil market situations.
Looking at this chart, it’s clear that both the OI metric and Polkadot’s price have experienced a significant decrease. This downturn aligns with recent geopolitical conflicts in the Middle East, which negatively impacted investor confidence. The major cause of the reduced Open Interest is the liquidation of numerous long positions in perpetual markets.
After this, the market seems to be experiencing a calming down, possibly indicating an upcoming increase in buying and selling of futures contracts. Subsequently, this may lead to heightened market action and increased chances for greater price swings.
This post is powered by Polkadot.
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2024-04-17 17:30