Is Polkadot Destined For A Massive Move After Consolidating Around $7? (DOT Price Analysis)

After a bounce from the lower end of the current price range at $6.4, Polkadot saw a rally, hitting the upper threshold, coinciding with a major resistance area. Consequently, a slight rejection is expected, with the price targeting the lower part of the range.

Technical Analysis

By Shayan

The daily chart

After a close examination of the daily chart, Polkadot is seen to be moving sideways, oscillating between the notable support level at $6.4 and the crucial resistance at $7.4. This has left the market in a state of uncertainty as to its future course.

Recently, Polkadot found support near the lower limit of the range at $6.4, leading to a bullish rally. However, this momentum was reduced by reaching the upper limit above $7.4, which also coincides with the critical 200-day moving average, leading to a minor rejection.

This indicates a balance between buyers and sellers, which can lead to continued consolidation until a valid breakout occurs. However, a minor downtrend is forecast in the near term, targeting the crucial $6.4 level.

Source: TradingView The 4-hour chart

Analyzing the 4-hour period, Polkadot’s price has been bounded within a decisive range, with support near the pivotal $6 level and resistance around the $7.4 threshold.

However, there are no clear signs indicating his next move. After a period of upward movements, the price once again found the critical resistance zone delineated by the Fibonacci levels of 0.5 ($7.4) and 0.618 ($7.8).

Current action near this fundamental resistance suggests potential seller dominance and insufficient bullish momentum, possibly leading to another bearish rejection. As a result, the price is expected to decline, and the next target will be the lower limit of the range.

Source: TradingView Sentiment Analysis

By Shayan

Amid the recent price uncertainty surrounding Polkadot’s potential trajectory, futures market sentiment analysis becomes crucial for participants to anticipate the cryptocurrency’s future prospects. The chart provided shows open interest and funding rate metrics along with the price of Polkadot on the daily timeframe.

Looking at the chart, it is clear that after a recent decline and subsequent lateral consolidation, both the OI metric and funding rates have experienced significant declines, reaching their lowest values. A similar pattern was seen in early 2024, when Polkadot’s price settled at the current level, which ultimately led to increased demand and the start of a robust uptrend.

With both metrics experiencing notable declines, the futures market appears poised for aggressive implementation of futures positions, which may lead to a significant move. Consequently, if the current consolidation phase concludes with intensified demand and the implementation of long positions, the market is poised to embark on a remarkable upward trend, pointing to higher price levels.

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