As an analyst with extensive experience in cryptocurrency markets, I believe that the recent price action of Polkadot (DOT) indicates a continuation of the mid-term consolidation stage. The significant resistance region at $7.5 halted DOT’s bullish momentum, resulting in a 12% decline, and the price has been unable to sustainably break above this level.
As an analyst, I’ve observed that Polkadot encountered a roadblock at the $7.5 resistance level, which caused its bullish trend to falter and result in a 12% price decrease.
Nevertheless, DOT’s price action hints at the continuation of the mid-term consolidation stage.
Technical Analysis
By Shayan
The Daily Chart
As a researcher studying Polkadot’s price movements, I’ve observed that its daily chart presents an ambiguous outlook. The cryptocurrency has been trading sideways for an extended period between the resistance at $7.5 and the support at $6.2, without showing any significant upward or downward momentum.
During this consolidation phase, the balance between purchasing and selling activity is evident as suggested by the RSI (Relative Strength Index) oscillating near the 50 threshold.
Lately, the price encountered refusal near the pivotal $7.5 resistance and the substantial 100-day moving average, resulting in a considerable drop.
In a wider perspective, the price is expected to keep bouncing between the resistance at $7.5 and the support at $6.2. For a clear trend to emerge, a significant breach of this price range is necessary.
The 4-Hour Chart
On the 4-hour chart, Polkadot’s price was unable to regain the significant resistance zone, marked by the $7.4 (0.5 Fibonacci level) and $7.8 (0.618 Fibonacci level). This inability to advance resulted in a notable rejection, triggering a bearish correction that pushed the price back towards the lower edge of the ascending wedge at approximately $7.
When the price hit a significant level of resistance, it triggered a modest increase in purchasing interest and need, causing a small price rebound. Nevertheless, the force behind this rebound is not robust enough to confirm a full-fledged trend reversal.
As the price nears a constricted zone defined by the lower edge of the wedge and the $7.1 (0.5 Fibonacci) level, the ensuing price development is crucial in determining the next directional shift. A potential break beyond these levels could occur soon.
Sentiment Analysis
By Shayan
As a crypto investor, I find it insightful to examine the futures market data in relation to Polkadot’s price movements. The following chart illustrates the Polkadot Funding Rates and Open Interest metrics for the futures market. These metrics reveal whether buyers or sellers are more actively placing their futures orders, allowing me to gauge the overall sentiment of the futures market.
During the extended period of price stability as depicted on the graph, the two indicators hovered around their lowest points, signaling a time of minimal action and apprehension. Lately, though, there’s been a noticeable uptick in both Funding Rates and Open Interest figures, pointing to an increase in futures market activity.
A rise in these metrics signifies that long-standing orders may grow more assertive, mirroring market participants’ evolving perspective towards a more optimistic viewpoint. If this tendency persists, it might set the stage for an uptrend, potentially enabling Polkadot to surge out of its lengthy and energy-sapping sideways movement.
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2024-06-05 16:25