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Friday, July 19, 2024

Is the Worst Over for DOT or More Pain to Come? (Polkadot Price Analysis)

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Polkadot’s price has been consolidating sideways near the critical resistance region around the $6.5 threshold. A slight bullish reversal might occur in the short term due to the potential heightened demand near this pivotal level.

Technical Analysis

By Shayan

The Daily Chart

The daily chart shows Polkadot’s bearish momentum faded after reaching the substantial support region of $6.5, an important level in recent months. This pivotal support is accompanied by substantial demand, which could potentially overcome the ongoing supply.

However, the price is trapped within a critical and decisive range, bounded by the $6.5 support and a multi-month dynamic descending trendline. As the range narrows, an imminent breakout will likely determine the price’s next move in the short term.

Source: TradingView

The 4-Hour Chart

On the 4-hour chart, Polkadot experienced a substantial increase in demand near the crucial $6.2 mark, leading to an impulsive surge toward the short-term local resistance of $6.8.

However, the price then faced selling pressure, resulting in a retrace. The $6.8 local resistance serves as the last supply zone before the initial breakout of the wedge pattern, and the recent rejection from this level indicates a valid pullback to the broken level, highlighting the ongoing bearish sentiment in the market.

Despite this, the price appears confined to $6.2 support and $6.8 resistance. A breakout from this range will likely clarify the upcoming price direction.

Source: TradingView

Sentiment Analysis

By Shayan

Polkadot’s price is currently fluctuating around the $6.5 level, and the Binance liquidation heatmap provides insights into this behavior. This price region appears to be filled with demand, having supported the price multiple times.

The heatmap reveals significant buy-stop orders and liquidity above the $7.3 mark. This makes it a potential target for buyers, especially if there is a bullish revival in the coming days.

Should the price reach this crucial range, it would likely act as a resistance, resulting in a struggle between buyers and sellers. This scenario could lead to heightened volatility and increased market activity.

Source: Coinglass

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