Disclaimer: The findings of the following analysis are the only opinions of the writer and should not be considered investment advice
Dot [DOT] has steadily declined in recent months. During this phase, the six-week trendline resistance (white, dashed) has slowed down recent bullish revival attempts. The buyers defended the $6.5 support for more than 17 months, while the sellers continued to find new lows.
The recent rebound helped the alt break out of its falling wedge-like structure. But the resistance of 20 EMA (red) may hinder DOT’s near-term recovery.
At the time of writing, DOT was trading at $6.94, up 3.28% in the last 24 hours.
DOT 4 Hour Chart
Recent retracements pulled the DOT to its 17-month low on June 13, after dropping 33% in three days (June 10-13). Since then, buying efforts have seen a rebuttal due to the six-week trendline resistance. This decline formed a short-term falling wedge over the 4-hour timeframe.
DOT’s previous uptrend has reaffirmed the likelihood of the wedge breaking upwards. Also, buying volumes on the breakout day were relatively higher than normal.
Given the $6.5 support level coinciding with the pattern’s breakout, DOT could experience some buying pressure in the coming sessions. In such a case, traders/investors should look for a close above the 20 EMA and the Point of Control (POC, red) to time profitable entries. In this case, the buyers would aim to retest the USD 8 resistance.
However, the inability to break the chains of the $7-$7.3 range could continue the sluggish behavior on the charts.
The growth of the RSI from the 35-mark has helped to retest the resistance of the 44-mark. To reopen robust opportunities for recovery, the index must find a close above this level. Also, the bullish divergence with price caused a slight rise in the bearish CMF.
The MACD lines have been selling power easily in the past 24 hours. However, until these lines cross the balance, buyers would find it difficult to change the broader story.
Given the current market structure, the altcoin would likely face difficulties to trigger a strong bull run. But the indicators suggested ease in selling power in the four-hour time frame. A close above the $7, $7.3 range is needed to confirm the buy advantage.
Finally, an overall analysis of the market sentiment becomes essential to complement the technical factors in order to take a profitable move.
This post This price range could be the key to Polkadot’s [DOT] short-term trajectory
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