Polkadot Price Analysis: Will DOT See A Rally Or Steep Decline?

by

As an experienced analyst, I have closely monitored Polkadot (DOT) over the past few weeks, and based on the current price action and chart patterns, it appears that DOT is trapped in a narrow range between $6.40 and $7.60. This pattern, which looks like a rising wedge, has been forming since mid-April, and DOT’s failure to break above the resistance at $7.60 has resulted in bearish sentiment among traders.

Despite a highly bearish week causing Polkadot (DOT) to dip as low as $6.97, it has bounced back slightly, maintaining a value above the $7 mark during the weekend.

In the present market scenario, Polkadot (DOT) is being traded slightly above the $7 mark, with buyers and sellers engaged in a fierce struggle for dominance during this trading period.

Can Polkadot (DOT) Break Its Current Pattern

Examining the Polkadot (DOT) price trend, it’s clear that the asset has been trapped in a rising wedge formation since the second half of April. During this time, DOT bounced between its support levels of $6.40 and $7.60, then later between $7 and $7.60. However, after failing to breach the resistance at $7.60, DOT experienced a steep decline of 3.54% on Tuesday, which also caused it to fall beneath its 200-day moving average. On Wednesday, sellers maintained control, pushing the price down as far as $7.27 before a slight rebound left DOT at a closing price of $7.17, representing a daily loss of 2.58%.

On Thursdays trading, DOT dipped below both its 20-day and 50-day moving averages, triggering a sell-off that drove the price down to $6.99. However, after an intense session on Friday, DOT closed at $6.97, marking a decrease of 0.29%. The day saw prices plummeting to a low of $6.80 before buyers intervened, pushing the price up towards $7. The following weekend brought about an increase of 1.29%, with DOT hitting a high of $7.06 on Saturday, only to drop back to $6.99 on Sunday. The week commenced with another volatile day for DOT, which surged to $7.19 but failed to break past the 20-day moving average, resulting in sellers pushing the price back down to $7.01. Presently, the market is dominated by buyers, albeit barely, with DOT trading at $7.02.

Where Does Polkadot (DOT) Go From Here?

Based on the Polkadot (DOT) price trend, the cryptocurrency has encountered resistance at the $7.60 mark and retreated from it on two occasions. Notably, DOT enjoys support at $7 and $6.40. In order for a potential recovery, DOT must initially surmount the $7.20 barrier where the 20-day Simple Moving Average (SMA) lies, potentially serving as resistance. Overcoming this hurdle could lead to a challenge of the $7.60 resistance, with a possible advance towards $8 if successful. Conversely, a bearish scenario would see DOT succumbing to selling pressure and falling back to the $6.40 support level should the $7 support be breached.

Based on the analysis of technical indicators, the MACD has shifted to a bearish stance for DOT. Yet, should DOT manage to surge past the $7.20 mark, there’s a chance it may revert to a bullish trend.

Read More

2024-06-04 13:06