Connect with us
Active Currencies 14560
Market Cap $2,679,783,996,782.67
Bitcoin Share 49.87%
24h Market Cap Change $-1.10

DOT witnesses strong gains but this is why bulls may lose steam at $4.2

2min Read

The H4 market structure of DOT was bullish, and the OBV was also in a steady ascent since 28 September. However, there was a reason traders could still look for selling opportunities.

Polkadot breaks out past $4.22 resistance but here's why bulls could see a reversal

Share this article

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.

  • Polkadot has a bullish structure on the one-hour and four-hour chart, but this could soon change
  • Data from MobChart suggested that short sellers could force a drop toward $4

Polkadot [DOT] saw a good performance on the price charts toward the end of the previous week. These gains continued over the weekend but the bears began to impose themselves on Monday, 2 October.


Realistic or not, here’s DOT’s market cap in BTC’s terms


Polkadot’s NFT ecosystem saw a decline in key metrics over the past week but this factor didn’t have a negative short-term impact on the token. However, developments over the past 24 hours saw bears succeed in taking the upper hand.

DOT saw a rejection at the $4.3 resistance

Polkadot breaks out past $4.22 resistance but here's why bulls could see a reversal

Source: DOT/USDT on TradingView

In the early hours of 2 October, Polkadot climbed to $4.31 but began to decline. Bitcoin’s [BTC] dip from $28.5k to $27.9k, as of press time, also played a part in swaying the DOT market sentiment.

The H4 market structure was bullish, and the Relative Strenth Index (RSI) was at 56, showing the uptrend was not lost yet. The On-Balance Volume (OBV) has also been on a steady ascent since 28 September. Taken together, the technical indicators signaled bullish strength.

Yet the $4.22-$4.32 zone was a stiff resistance zone. In early September it had served as support. The $4.3-$4.6 region was a bearish breaker block on the 12-hour chart that stretched back to mid-June. Hence, it was possible that DOT could face rejection at this HTF resistance.

Order flow analysis shows a dip could be imminent

Polkadot breaks out past $4.22 resistance but here's why bulls could see a reversal

Source: MobChart

Data from MobChart showed the emergence of a $44k limit sell order just a few hours before press time. This order sat at $4.35. Interestingly, at the time of writing a $50k limit buy order at $4.1 was removed. Together they showed that sell pressure would likely intensify and drag DOT toward $4, where close to $200k worth of buy orders were available.


How much are 1, 10, or 100 DOT worth today?


Traders can look to short DOT should the price bounce and reach the $4.22-$4.3 zone. Entering a short below $4.2 could be risky. To the south, the take-profit target can be $3.9, but it could be ambitious. A more grounded take-profit target would be the $3.95-$4 support zone. Meanwhile, the short idea would be invalidated should Polkadot climb above the $4.35 mark.

Share

Akashnath Sumukar works as a Senior Journalist at AMBCrypto. Based in Chennai, India, he has been an avid follower of the cryptocurrency market since Bitcoin’s boom and bust cycle of 2017. A graduate in Chemical Engineering, he is an expert in technical analysis. In fact, Akashnath has a particular interest in reading price charts and predicting how an asset will move over the short and long term. A self-taught trader and as someone who holds cryptos himself, he is always on the lookout for the next opportunity he can possibly capitalize on, while also educating his audience.
Read the best crypto stories of the day in less than 5 minutes
Subscribe to get it daily in your inbox.
Please check the format of your first name and/or email address.

Thank you for subscribing to Unhashed.