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Analysis

Polkadot presents a possible range formation

2min Read

DOT had a bullish order block from the 1-day chart at the $4.5 area. To the south, the $4.22 level was a significant support level. It was a level that Polkadot rallied from in early January this year.
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Polkadot presents a possible range formation
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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 bearish market structure in the short term.
  • A reversal was not likely as things stand but the price was within a higher timeframe area of interest.

Polkadot [DOT] saw a strong rally in June that saw the prices go from $4.2 to $5.5. The bulls tried to breach this level, but were unable to close a daily trading session above the $5.56 resistance level.

Read Polkadot’s [DOT] Price Prediction 2023-24

In August, the price began to trend downward as sellers strengthened their hold on the market. But things could begin to change as DOT enters a demand zone. Can the bulls reverse the past month’s losses?

Polkadot was trading within a higher timeframe area of interest

Polkadot [DOT] presents a possible range formation- here's what traders can expect

Source: DOT/USDT on TradingView

DOT had a bullish order block from the 1-day chart at the $4.5 area. To the south, the $4.22 level was a significant support level. It was a level that Polkadot rallied from in early January this year. Therefore, this was an area of interest where a bullish reversal could occur.

The indicators did not support this idea at press time. The OBV has been in a downtrend over the past week, showing high volumes of DOT sold. The RSI was also beneath neutral 50 and outlined bearish momentum. Moreover, the price and the RSI were making a hidden bearish divergence.

This showed that further losses were likely. The H4 chart showed that a recent lower high was at $4.56. A move past this level would break the market structure and flip it bullishly. This would be the first step toward recovery and can serve to alert traders of a possible long trade.

Invalidation of this idea would occur if DOT fell below the $4.4 short-term support, as it would indicate bulls were weak.

The market sentiment remained bearish as selling pressure continued

Polkadot [DOT] presents a possible range formation- here's what traders can expect

Source: Coinalyze

The Open Interest chart showed that there was not a notable capital influx over the past week. During this time, DOT did not see a significant trend develop in the short-term charts. The inference was that speculators were not convinced the conditions were bullish yet.

Is your portfolio green? Check out the DOT Profit Calculator

This finding was backed by the technical indicators and the price action. The spot CVD was also in a downtrend, highlighting the steady selling that Polkadot faced.

While it could change and a move higher could occur, traders can wait for a bullish structure break before looking for opportunities.

 

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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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