Is the worst over for DOT or more pain to come? (Polkadot Pricing Analysis)

Polkadot price has been consolidating sideways near the critical resistance region around the $6.5 threshold. A slight bullish reversal could occur in the near term due to the potential increase in demand near this fundamental level.

Technical Analysis

By Shayan

The daily chart

The daily chart shows that Polkadot’s bearish momentum faded after reaching the substantial support region of $6.5, an important level in recent months. This fundamental support is accompanied by substantial demand, which could exceed the current supply.

However, the price is trapped inside a critical and decisive range, bounded by the $6.5 support and a dynamic multi-month downtrend line. As the range narrows, an impending breakout is likely to determine the next short-term price move.

Source: TradingView The 4-hour chart

On the 4-hour chart, Polkadot experienced a substantial increase in demand near the crucial $6.2 mark, which led to an impulsive rise towards the local short-term resistance at $6.8.

However, the price faced selling pressure, leading to a pullback. The local resistance at $6.8 serves as the last supply zone before the initial breakout of the wedge pattern, and the recent rejection of this level indicates a valid pullback to the broken level, highlighting the ongoing bearish sentiment in the market.

Despite this, the price seems bounded by support at $6.2 and resistance at $6.8. A break of this range will likely clarify the next price direction.

Source: TradingView Sentiment Analysis

By Shayan

The price of Polkadot is currently fluctuating around the $6.5 level, and the Binance Liquidation Heatmap provides insight into this behavior. This price region seems to be full of demand, having supported the price several times.

The heat map reveals significant buy stop orders and liquidity above the $7.3 mark. This makes it a potential target for buyers, especially if there is a bullish revival in the coming days.

Should the price reach this crucial range, it would likely act as resistance, leading to a fight between buyers and sellers. This scenario could lead to increased volatility and increased market activity.

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