For the recent period, Polkadot [DOT] has been following a conventional upward channel pattern, indicating a possible bullish trend in the near future. Nonetheless, the value encountered resistance around the $4.9 level and has been consolidating between the 20-day and 50-day EMAs ever since.
At the time of this composition, DOT was trading at approximately $4.58, experiencing a decline of about 4% within the last 24 hours. This particular movement has brought DOT to a critical point as the coin tested the lower limit of the up-channel.
Is Polkadot set to maintain its positive trajectory?
Following a bounce back from the long-standing support at $3.9, DOT displayed a consistent upward trend, securing a remarkable surge of over 21% in the last three weeks. Nevertheless, the recent obstacle at the $4.9 resistance resulted in the value revisiting the $4.5-$4.6 range, slightly below the 50-day EMA.
Considering the upward drive witnessed over the past month, holders of DOT would ideally aim for a continued trading activity above the $4.5 mark to uphold the uptrend. Should the bulls successfully defend this zone, a potential retest of the $5 psychological barrier might occur, with the next major resistance positioned at $5.55.
Conversely, a sustained drop beneath $4.5 could pave the way for a more significant retreat towards the support band of $3.9-$4.1. This support level has previously served as a robust foundation for buyers seeking to rejoin the market.
At the time of writing, the RSI was at 53, indicating a relatively neutral standpoint. A further dip below 50 could signify a drop in bullish momentum, increasing the likelihood of a brief correction.
The price has been oscillating around the 20-day EMA ($4.52) and the 50-day EMA ($4.59). A breach below these levels might induce bearish pressure, while a bounce from this point becomes crucial for preserving the bullish narrative.
Analysis of Derivatives Data Revealed the Following
The trading volume witnessed a notable surge of nearly 70% (reaching $182.67 million), while the open interest marginally decreased by 0.54% to $216.71 million within the past day. These metrics indicate a rise in speculative activities tempered by cautiousness among traders, as the open interest remained relatively unchanged.
The long/short ratio displayed a slight inclination towards short positions at 0.9004 across various exchanges, suggesting a degree of bearish sentiment.
However, on Binance, the long/short ratio for DOT/USDT stood at 4.102, demonstrating that major traders predominantly held long positions, anticipating a potential price recovery.
Investors in Polkadot should monitor Bitcoin’s movements and assess the general market sentiment to gauge the likely course of the altcoin in the coming days.