Throughout the previous month, the performance of Polkadot [DOT] has been less than impressive, marked by a prevailing bearish sentiment leading to an 18.97% decrease.
The future trajectory of DOT remains ambiguous as conflicting data continues to divide market sentiment, allowing for potential volatility in the upcoming trading sessions.
Polkadot’s Position Between Significant Levels
At present, DOT is positioned between two crucial levels that could influence its path in the upcoming trading periods.
Having recently rebounded from a support level at 3.959, DOT may advance towards 4.615 or 4.964 if this support level remains intact. However, there is a supply zone directly above that might induce selling pressure and drive the price downwards, possibly reverting DOT to its August low.
In an attempt to gauge the potential movements, CryptoCrypto scrutinized technical indicators, yielding a mix of signals and leaving the overall outlook uncertain.
Mixed Signals from Traders Impacting DOT’s Direction
Two key indicators, the Chaikin Money Flow (CMF) and the Parabolic SAR, convey a blend of positive and negative signals for DOT, introducing uncertainty regarding its future trajectory.
The Chaikin Money Flow (CMF), which evaluates the flow of capital in or out of an asset, has exhibited an uptick, registering a current value of 0.11. A positive CMF reading indicates escalating buying pressure, often correlating with a potential upward price momentum for DOT.
This observation implies that if this momentum persists, DOT could surpass its existing supply zone, potentially maintaining an upward trend.
Conversely, the Parabolic SAR, a trend-tracking indicator signaling reversals, portrays a bearish sentiment with multiple dots above DOT’s price, indicating continuous selling pressure and a probable continuation of the downtrend.
When the Parabolic SAR dots appear above the asset’s price, it denotes resistance and the likelihood of further price declines.
Given the contradictory indications from these two indicators, CryptoCrypto sought insights from on-chain activities to shed light on DOT’s potential next moves.
Emergence of Incremental Buying Enthusiasm for Polkadot
Data sourced from Coinglass reveals a positive funding rate for DOT, indicating an uptick in long positions among traders. The latest reading demonstrates a funding rate of 0.0109% for DOT.
A positive funding rate signifies that traders with long positions are compensating those with short positions to maintain price balance. This trend typically signifies an underlying bullish sentiment, with more traders expecting price rises, potentially propelling DOT higher.
Should this buying momentum persist, DOT could breach its current supply zone and trend upwards.