DOT Explodes Above $7.5 But Watch This Metric Closely: Polkadot Price Analysis
polkadot has recently witnessed a surge in demand; This led to a price increase that exceeded the previous high and broke the declining trend line that had been running for several months. The price is currently approaching the upper end of the consolidation range and is on the verge of breaking it.
Technical analysis
By Shayan
Daily Chart
A detailed analysis of Polkadot’s daily chart shows that after a prolonged phase of horizontal consolidation, a new rise in demand is pushing the price even higher. This rise allowed Polkadot to break several key resistance levels, including a descending trend line for several months, the previous high of $7.47, and the 200-day moving average.
Now the price is approaching the upper limit of this long-standing range and is on the verge of breaking this limit.
If buyers manage to break above this range, this could signal the beginning of a sustainable uptrend. However, if the selling pressure intensifies, it is possible for the downward trend towards the lower limit to reverse. Price action around this key resistance zone will determine Polkadot’s short-term trajectory.
Source: TradingView
4-Hour Chart
On the 4-hour time frame, Polkadot’s recent bullish momentum is more evident; The price is experiencing a sudden 12% rise towards a key resistance area.
This critical range is bounded by the Fibonacci levels of 0.5 ($7,415) and 0.618 ($7,821). However, the price has been fluctuating in an ascending wedge pattern for a long time, and after the recent increase in demand, it is now retreating slightly towards its upper limit.
If buyers can overcome the key resistance at $7.8, the next target will be the upper limit of the wedge in the medium term.
Conversely, a bearish trend reversal could lead to another downward move targeting the lower boundary of the wedge. A clear breakout from the wedge pattern is needed to determine Polkadot’s upcoming direction.
Source: TradingView
Sentiment Analysis
By Shayan
Polkadot’s price has recently experienced a significant rise, raising expectations of a potential uptrend in the medium term. Therefore, as futures market positions are important drivers of volatility, analyzing futures market sentiment is of great importance to assess whether this upward trend will continue.
This chart shows Polkadot’s daily price movements, as well as its funding rate and open interest measurements. Despite the recent upward trend, both open interest and funding rates do not show a significant increase and continue to remain close to their lowest levels. This suggests that the recent price movement is not due to increased bullish activity in persistent markets.
While the price of Polkadot is rising, the sustainability of this uptrend depends on the sentiment of the futures market. If open interest and funding rates begin to rise, this will indicate strong bullish momentum and potentially solidify the uptrend. Conversely, if these indicators remain low, the uptrend may not provide the necessary support for long-term continuation. Investors should monitor these indicators closely to better understand the direction of the market in the coming weeks.
SPECIAL OFFER (Sponsored)
Binance Free $600 (CryptoPotato Exclusive): Use this link to register a new account and receive a special $600 welcome offer on binance (full details).
LIMITED OFFER 2024 on bydfi Exchange: Welcome reward up to $2,888, use this link to register and open 100 USDT-M positions for free!
Disclaimer: The information contained on CryptoPotato belongs to the authors quoted. They do not represent CryptoPotato’s views on buying, selling or holding any investment. It is recommended that you do your own research before making any investment decisions. You use the information provided at your own risk. See Disclaimer for more information.
Cryptocurrency charts from TradingView.
#DOT #Explodes #Watch #Metric #Closely #Polkadot #Price #Analysis