Polkadot buyers have defended $6.9 as support, is $9 the next target?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The market structure on the 4-hour chart was bearish.
- The $7.2 support could be critical for short-term bulls.
Over the past week, Bitcoin has oscillated between $23.5k and $25.2k. Polkadot bulls seized the initiative and drove the price on a ferocious rally last week. Now, even though the technical structure was bearish, the bulls still have some hope.
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A defense of the $7.2 zone as support and a move back above the $7.5-$7.6 area will be needed before we can conclude a bullish bias was present for DOT. The bounce from $6.9 to $7.38 was a good effort but the bears still had an advantage.
Polkadot witnessed a sharp bounce from the imbalance and is back above $7.2
On the 4-hour chart, an inefficiency was seen in the $6.9-7.15 area. Highlighted in white, the presence of an FVG meant that the price was likely to retrace to fill the area before continuing its previous uptrend.
In the recent pullback, the bullish market structure on the 4-hour timeframe was broken and flipped to bearish. The drop beneath the higher low at the $7.2 support level had flipped the structure to bearish.
The RSI had also fallen steeply beneath the neutral 50 line to highlight the bearish momentum.
Instead of making further losses, the bulls were able to claw their way back upward once more. The bounce from $6.9 reached $7.38, but the structure remained bearish.
This meant a trader’s bias on the H4 chart can be bearish. Despite the downturn, the CMF was at +0.14 to show significant capital flow into the market.
How much are 1, 10, and 100 DOT worth today?
If Polkadot falls beneath $7.2, shorting opportunities will arise on lower timeframes. Until then, a bounce and a rally were a possibility. If the bulls manage to drive prices above 7.56 in the coming days, $8 and $9 could be reached.
Open Interest sees a slight pullback alongside the price
On 17 February, Polkadot surged from the $6.3 zone and pushed past the $7 mark. The next day the price retested $7.2 as support.
At that time, Coinglass data noted a strong increase in Open Interest. This showed strong bullish sentiment in the market at that time.
During the time of writing, the OI noted some decline. The price was also in a pullback. Together, they highlighted the market sentiment to be in bearish favor. The bulls did not possess much strength as things stand.