Polkadot Price Prediction: Anticipated 10% Increase Forecasted for the Upcoming Week
After finding support around $4 earlier in the month, Polkadot [DOT] has struggled to maintain its positive momentum in recent days. Presently, it seems to be heading back towards that crucial support level once more.
An examination of the liquidity chart suggests a potential upward movement for DOT to capture liquidity before a possible reversal. Traders are pondering whether to initiate long positions now or wait for a bounce to enter short trades.
Analysis of Volume Profile Indicates DOT Encounters Resistance
Looking at the visible DOT volume profile range through early July, it becomes evident that the point of control resided at $4.556. Following a recent rejection from this level, the price is now descending towards the subsequent high-volume support node at $4.224.
The Directional Movement Index signals a strong downtrend with both the -DI (in red) and ADX (in yellow) positioned above 20. Notably, since June, the price action has been characterized by a series of lower highs and lower lows, indicating a continuing downtrend.
Despite these trends, the Chaikin Money Flow (CMF) stands at +0.11, suggesting substantial capital inflows into the market. This surge in buying pressure serves as a positive indicator amidst the prevailing market conditions.
Potential Formation of Ranges Due to Magnetic Zones
An analysis of Polkadot’s 1-month liquidation heatmap reveals two significant liquidity clusters of interest. The primary cluster, located at $4.6-$4.7, along with another at the $4 support level, are key areas to monitor.
The liquidity band towards the north appears more robust, likely drawing prices upwards before a potential reversal towards the $4 liquidity pool. This scenario might result in Polkadot establishing a price range between $4 and $4.7 over the upcoming weeks.
Disclaimer: The information provided in this analysis should not be considered as financial, investment, or trading advice. It solely reflects the writer’s personal opinion.