Polkadot Price Analysis: DOT Rises 10% Weekly, Bear Trap Confirmed?
polkadot recently saw increased buying activity near the critical $5.5 support area, which led to a notable rally that saw it rise above the lower boundary of the previously breached multi-month triangle. This price action suggests a false breakout and points to a potential uptrend period.
Technical analysis
By Shayan
Daily Chart
A detailed analysis of Polkadot’s daily chart reveals a significant bullish revival near the $5.5 support range, where buying activity intensified, leading to a revival of demand and a notable increase in prices.
As a result, Polkadot broke above the previously breached lower trendline of the multi-month triangle, signaling a false bearish reversal. This action suggests increased buying interest among market participants.
Currently, DOT is facing a very important resistance area at $6.3. If buyers can break this threshold and maintain the bullish momentum, the uptrend could continue towards the 100-day moving average of $7.2. Conversely, if the price is rejected at this resistance, Polkadot is likely to enter a consolidation phase in the $5.5-$6.3 range.
Source: TradingView
4 Hour Chart
The 4-hour chart provides more insight into Polkadot’s price action. Following a breakout above the descending price channel, the price made a significant rise, possibly indicating a revival in demand and buying pressure resulting from activity in persistent markets.
DOT is currently facing a critical resistance area which includes the $6.33 resistance level and the previous major rally at $6,428.
If Polkadot recovers from this resistance threshold, it could trigger a mild short squeeze and change market sentiment, leading to a sustained bullish trend towards the $7 resistance zone. However, if the price rejects at this level, a short-term consolidation phase is expected in the $6.3-$5.4 range. Therefore, Polkadot’s price action in the coming days will be crucial in determining its direction.
Source: TradingView
Sentiment Analysis
By Shayan
Polkadot has recently experienced a surge in demand, leading to a significant rally towards the previous major rally of $6.3. Understanding supply dynamics at this critical level is crucial to making informed trading decisions.
The accompanying chart shows potential liquidation zones within Polkadot’s price action, providing important insights for smart money medium-term strategies.
The chart reveals that the price has targeted liquidity pools above the highest bullish levels during the recent uptrend, reflecting strong bullish momentum and increased buying interest. A significant amount of liquidity is concentrated above the critical $6.3 resistance level; This could be a short-term target for buyers looking to recapture this pivot and liquidate short positions.
Capturing this remaining liquidity will allow buyers to continue their upward momentum and push the price higher in the medium-term. However, this level could also be a significant resistance point, and upcoming price action in this area will likely provide valuable insight into the future direction of Polkadot price.
Source: Coinglass
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