Will DOT’s retest of the $5.23 level yield a different result?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Polkadot bulls can’t get past the $5.55 obstacle.
- Speculators look to ride the selling wave with shorts holding a 51.95% advantage.
Despite flipping the $5.23 level from resistance to support, Polkadot [DOT] buyers experienced a pushback at the $5.55 resistance. This resistance level has proved a tough one to crack in the past month and once again stood in the way of the bullish advancement.
Realistic or not, here’s DOT’s market cap in BTC terms
With the market going through a price lull and Bitcoin [BTC] dipping under $31k, the furtherance of DOT’s bullish charge will depend heavily on the $5.23 support holding.
Is another sideways price action on the way for DOT?
A look southward showed range activity for Polkadot the last time price was stuck between the support and resistance levels of $5.23 and $5.55 respectively. On the previous occasion, bears prevailed after a month-long tussle to take the price to the December 2022 low of $4.24.
However, the scenario could be different this time if the $5.23 support holds. This could give bulls an advantage for a breakout if DOT ranges again between the critical support and resistance levels.
The Moving Average Convergence Divergence (MACD) posted a bearish crossover on 30 June before another price rally reversed it. A break and session close below the $5.23 support on the 12-hour timeframe would lead to a full bearish crossover.
The recent price rejection at $5.55 also saw the Relative Strength Index (RSI) dip sharply from 67 to 54, highlighting the waning buying pressure. With Bitcoin dipping slightly and altcoins following, this could be a bearish sign for DOT.
Speculators leaned toward bearish DOT
The 24-hour exchange long/short ratio data from Coinglass revealed market speculators actively looking for shorting gains. The $10 million difference between longs and shorts highlighted the 51.95% advantage held by sellers.
With the market wrecking millions of long positions over the past day, DOT was not left out. $214.89k worth of long positions were liquidated over a 12-hour period compared to just $12.20k shorts.
Read Polkadot’s [DOT] Price Prediction 2023-24
However, it is not all doom and gloom for bulls. While the on-chart price action hinted at shorting opportunities, traders should be cautious of a bullish Bitcoin, as this could reverse the dip for DOT.