Has Polkadot taken the first step towards $5.5?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Polkadot was near the range lows but saw a bullish structure break.
- The rise in demand meant the range highs were the next target, provided Bitcoin does not encounter sharp losses.
Polkadot [DOT] saw some bullish pressure emerge in the past 24 hours. On Monday, 28 August, Polkadot was able to breach a short-term resistance level at $4.56. This signaled bullish intent. However, the sentiment remained bearish across the crypto market.
Realistic or not, here’s DOT’s market cap in BTC’s terms
Bitcoin [BTC] was hovering above the $26k level, but was indecisive about the trajectory of its next move. It was likely that another move toward $25k could occur – which would lead to losses for DOT. Should traders lean bearish or bullish on the altcoin?
Polkadot has begun to march higher, but it was unclear if the bulls can sustain itThe 1-day chart showed that the $4.5 zone highlighted in cyan was a bullish order block. The $5.5 area marked in red represented a bearish order block, and together they showed that DOT could trade within this range in the coming weeks.
A look at the lower timeframe charts showed that there was a bullish market structure break on Monday when DOT climbed above the recent lower high at $4.56. Since it occurred within the higher timeframe order block, it appeared likely that bulls could drive prices higher.
Yet, the OBV did not see a strong move higher and continued to cling to a two-month-old support level. Meanwhile, the RSI remained below neutral 50 on the daily chart to show momentum favored the sellers.
The break in structure was accompanied by a swell in bullish conviction
How much are 1,10,100 DOTs worth today?
On 27 August, DOT fell from $4.52 to $4.42. This saw a contraction in the Open Interest, but a day later, the price of DOT shot higher to reach $4.68. The OI also climbed higher, which signaled an influx of capital and showed bullish sentiment in the futures market.
The spot CVD was flat over the weekend but noted a small move higher on Monday when the bullish structure break occurred. Therefore, they signaled further gains were possible. Yet, a volatile Bitcoin could cause losses for the short-term DOT bulls.