Polkadot price holds above $4.2 – Will DOT see a 20% move higher?
The lack of overwhelming sell pressure on the CMF across timeframes explained the Polkadot consolidation between $4.25 and $5.2.
- Polkadot retained a bearish structure on the daily and 4-hour price charts.
- Despite the lack of buying pressure, a 20% price move higher could commence in the next few days.
Polkadot [DOT] showed it was bearish in the long term, but it could see a 20% price bounce over the coming days.
This does not necessarily indicate that the short-term outlook was bullish. Rather, it reflected the consolidation phase that Polkadot has been in since early February.
The altcoin has been consolidating above the $4 level for a month now. This level was just above the November lows that spurred the rally to $11.65. Traders can use this consolidation profitably.
The Polkadot price targets for this week
The technical indicators showed bearishness and neutrality for DOT. The Awesome Oscillator was below 0 to signal downward momentum, but the CMF showed no significant capital flow in or out of the market.
The lack of overwhelming sell pressure explained the consolidation between $4.25 and $5.2. In recent weeks, a DOT bounce from $4.2-$4.5 to $5.2 has taken anywhere from three to seven days.
The 4-hour chart showed a bounce from the $4.2 region was underway once gain. The market structure on the H4 chart was bearish, but that does not rule out the chance of a Polkadot price bounce.
Once again, the CMF was in neutral territory on this timeframe, while the Awesome Oscillator noted bearish momentum. The $4.6 level could pose some resistance, but if the bulls beat this level, $5.2 would likely be retested.
The structure is bearish, but liquidation levels also drive price movements. The plunge from $5 to $4 on Monday meant the liquidation levels around $5.2 continued to grow.
Now that the liquidity to the downside has been tested, a move higher to the next magnetic zone made sense.
Hence, traders can expect a roughly 20% price move over the next week. This would be dependent on Bitcoin [BTC]– if BTC was unable to keep its short-term upward move toward $92k going, Polkadot might also falter.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion
