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Mapping Polkadot’s price – Navigating key resistance zones, risk of price reversal

2min Read

DOT bulls should be looking to take profits and not add to their positions now.

Mapping Polkadot's price - How to navigate key resistance zones, risk of price reversal

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  • Polkadot may have potential for a bullish trend, but buying pressure has been weak
  • Liquidation heatmap and Fibonacci levels seemed to be in agreement

Polkadot [DOT], at press time, exhibited bullish signs on the lower timeframe charts and seemed to be preparing to break past the $4.2-local resistance level. Bitcoin [BTC] was trading above the $92k-level as well, spurring bullish belief among altcoins.

An analysis last week revealed that the $3.8-level was a key level to flip to support. DOT‘s bulls have achieved this since then. Now though, they may have more ambitious plans.

Polkadot retains a bearish swing structure, but traders can be hopeful

Polkadot 1-day Chart

Source: DOT/USDT on TradingView

The swing structure in question on the 1-day chart was captured by the Fibonacci retracement levels. The high at $4.76 must be beaten to shift the structure bullishly. Meanwhile, the $4.18 and $4.44 levels were the key nearby resistances.

The A/D indicator has been flat over the past month. The lack of uptrend meant buying pressure was weak, and was a hint that bulls might not be ready to drive an uptrend. At the time of writing, the Awesome Oscillator was still below the zero line – A sign that momentum was not bullish on this timeframe yet.

The DMI also reflected a lack of a clear trend, with both the -DI and +DI below 20. The price action and the technical indicators noted wariness from market participants over the past week.

DOT 4-hour Chart

Source: DOT/USDT on TradingView

Zooming in, the bullish momentum seemed to be clearer.

The price has set a series of higher highs and higher lows over the past two weeks, forming a bullish structure. The DMI also reflected a strong uptrend in progress, with the A/D’s uptick hinting at greater demand for Polkadot.

Polkadot Liquidation Heatmap

Source: Coinglass

The liquidation heatmap also highlighted the risks of entering long positions now. The $4-$4.18 and the $4.3-$4.4 regions are both magnetic zones for the price. They could pull DOT higher, but they also pose the risk of a bearish reversal thereafter.

With the 1-day structure not yet bullish, traders in a long position can look to book profits at the $4.18 and $4.44 resistance levels. A surge beyond these two levels, and a retest of $4.44 or $4.76 as support, could be used to enter long positions for the next upward move.

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

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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.
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