Analysis
What next as DOT consolidates near $5.0
Polkadot takes cue from BTC and enters a price consolidation above $5. Which way will the breakout go?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- The recent rally has entered a price consolidation above $5.
- DOT’s Open Interest rates fluctuated amidst neutral sentiment.
Polkadot [DOT] recovered from substantial losses in early June after Bitcoin’s [BTC] sharp rally. However, DOT was far from reclaiming its April high of $7. It traded at $5.08 at the time of writing and remained constricted within a key price range since 24 June.
Read Polkadot’s [DOT] Price Prediction 2023-24
A recent report examined Cosmos and Polkadot ecosystems – enumerating positive similarities while acknowledging likely downsides. In the meantime, BTC consolidated above $30k, reinforcing the bulls’ expectation of further upside move.
Consolidation before a pump?
Initially, DOT consolidated within the $4.3 – $4.7 range between 10-20 June. It inflicted a bullish breakout on 20 June following BTC’s sharp rally to $31k, hitting a recent high near $5.21. With BTC fluctuations above $30k, DOT also chalked a near-term range formation above $5.0.
DOT’s price action has been constricting within the $5.0 – $5.21 range since 23 June. Unless BTC gives a clear direction, DOT’s short-term range bound could persist in the next few hours/days. So, targeting range extremes could offer minimal gains.
A bearish breakout and subsequent crack of $5.0 support will show weakness in the H4 structure.
In the meantime, the RSI sideways structure above the median mark and CMF (Chaikin Money Flow), indicated that buying pressure steadied, but capital inflows were positive. However, a breach of $5.0 support will expose $4.7 to a likely retest.
Open Interest rates fluctuated
Source: Coinglass
DOT’s fluctuations above $5.0 have also been marked by Open Interest (OI) rate fluctuations below $140 million. From 20 June, the OI, which tracks contracts in the futures market and overall sentiment improved, but faltered at $140 million.
How much are 1,10,100 DOTs worth today?
Also, the DOT Exchange Long/Short ratio reinforces a neutral sentiment with a little spread between long and short positions. Taken together, the futures market’s short-term outlook was neutral. Speculators should track BTC’s movement for better clarity.
Source: Coinglass
