- Polkadot could see a slightly deeper price drop before recovery.
- The higher timeframe momentum was shifting bearishly as prices retested a support level.
As a seasoned researcher with over two decades of experience in the crypto market, I’ve seen more than a few bull runs and bear markets. Looking at Polkadot [DOT], it seems we might be in for a slight dip before recovery. The higher timeframe momentum is shifting bearishly as prices retest a support level that has held strong for the past two weeks.
As an analyst, I observed that Polkadot [DOT] successfully broke out in a bullish market structure on Saturday, 24th August. However, this positive momentum has since reversed, with the price returning to its previous levels. Notably, it is currently hovering slightly above the $4.22 support level, a point it had previously tested two weeks prior.
In simpler terms, a recent analysis indicates that the area around $4 could serve as a mental barrier for Polkadot’s price. Will the Polkadot price drop down to $4 before it recovers, or will there be an uptick at around $4.22 instead? This is the question traders are considering based on this report.
Should traders be bearish or bullish?
On a day-to-day scale, the market trend indicated a bullish stance. The $4.22 mark has previously acted as a support level over the last fortnight and is expected to do so again. This repetition might push DOT prices up towards the current local peaks at $5. Such an upward movement could potentially initiate a price range.
On the 12-hour chart, the technical indicators hinted at a potential downtrend. Specifically, the Moving Average Convergence Divergence (MACD) crossed over to suggest a bearish shift in momentum, and the On Balance Volume (OBV) showed a rejection at the highs it reached earlier this month, which could indicate a reversal or weakening of the uptrend.
Consequently, the OBV didn’t descend extremely far, implying that traders might not foresee a shift towards $3.6 in the near future.
A revisit to this level might be required before recovery
According to the recent price analysis by AMBCrypto, it appears that the DOT price may temporarily drop below the current level of $4.22, indicating a potential short-term low. However, this breakdown might not be sustained for long.
Read Polkadot’s [DOT] Price Prediction 2024-25
At $4.11, there was a tightly packed group of potential selling points, which might draw prices towards them prior to a price change in the opposite direction.
Consequently, swing traders might aim to purchase when the price ranges between $4.05 and $4.11, with an objective of triggering a turnaround towards $5.17, which is the next significant pool of market activity ahead.
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2024-08-29 19:03