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Polkadot’s price falls past $7 – How does this affect DOT’s prediction?

2min Read

AMBCrypto’s analysis of Hyblock data suggested that a bounce past $7 is possible, but what could follow next?

Polkadot's price falls past $7 - How does this affect DOT's prediction?
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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.

  • Market structure remained bullish due to the overwhelming strength of buyers in the last five days
  • A retest of the $6.3-level will be likely should DOT close a session below $6.8

Polkadot [DOT] has leaned strongly north in December so far. Despite the pullback from $7.68 over the weekend, the altcoin retained its bullish market structure. Bitcoin’s [BTC] latest dip saw DOT recede considerably too.

It is possible that a short-term resistance level just above $7 could rebuff bulls should DOT bounce in the coming hours or days. What should traders watch out for next?

Short-term move, subsequent retracement offered some clarity on the way forward

Polkadot

Source: DOT/USD, TradingView

From 7 December to 9 December, DOT saw a swift move north from $5.9 to $7.69. Soon after, the bulls were beaten back and prices momentarily dipped to $6.285 a few hours before press time.

The explosive rally past $7 was used to plot a set of Fibonacci retracement levels (cyan). The 78.6% retracement level was at $6.284, where Polkadot prices withdrew. Therefore, two scenarios are possible. The bullish one is where DOT surges higher without dropping below $6.8.

The slightly bearish scenario, at least in the short term, would be a slow drop towards $6.285 once more. Following such a dip, the uptrend could resume. In either case, to the north, the next bullish target is at $7.9 – A higher timeframe resistance level. The $8.21 and $8.8-levels could obstruct the buyers as well.

Liquidation data showed a bounce past $7 is likely

Polkadot

Source: Hyblock

AMBCrypto analyzed the liquidation level data from Hyblock. The last couple of days saw the Cumulative Liq Levels Delta drop steadily. The latest fall to $6.3 saw it go red, suggesting that a move upward could contribute to pain in the Futures market.


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


Low leverage short positions were opened on 11 December with $7.12 as the estimated liquidation level. Combined with the negative Delta, a bounce in prices to collect liquidity before a reversal is possible.

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Akashnath S is a Senior Journalist and Technical Analysis expert at AMBCrypto. He specializes in dissecting price action, identifying key market trends through advanced chart patterns, and forecasting both short-term and long-term asset trajectories. His distinct analytical method is grounded in his academic training as a Chemical Engineer. This background provides him with a systematic, process-oriented approach to market data, enabling him to analyze the complex dynamics of financial markets with precision and objectivity. Having actively covered the cryptocurrency space since the landmark 2017 market cycle, Akashnath possesses years of experience navigating both bull and bear markets. This seasoned perspective is critical to his insightful reporting on market volatility and evolution. As an active market participant, Akashnath enhances his analysis with crucial, hands-on experience. This practical application of his technical skills ensures his insights are not merely theoretical, but are also relevant and actionable for an audience looking to understand and navigate trading opportunities. He is dedicated to educating readers on the nuances of technical analysis, empowering them with the knowledge to make more informed financial decisions.
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