Polkadot price has broken above the $5 resistance mark for the past few trading sessions. In the last 24 hours, DOT has appreciated 3.8%. The Bitcoin price has been rising, causing other altcoins to move higher on their respective charts as well.
As Bitcoin crossed the $18,000 price mark, other altcoins broke through their immediate resistance marks. Polkadot price momentum remains bullish on the shorter time frame. The technical outlook for DOT showed that despite a price correction, accumulation on the chart increased.
Polkadot Demand also showed an increase on its chart. The price of the asset must remain above the support line of $5.40 and break the resistance level of $6.20 if the coin is to maintain a bullish stance for a longer period of time.
The DOT daily chart is also pointing towards an upcoming price drop, which means that traders may be presented with short selling opportunities. DOT is currently trading at an 89% discount from its all-time high insured in 2021.
Polka Dot Price Analysis: One-Day Chart
DOT was exchanging hands at $5.89 at the time of writing. Polkadot had formed a cup and handle pattern, which means that the bullish momentum may continue, which is why Polkadot resumed its northward journey on the daily chart.
The coin’s overall resistance stood at $6. Breaking past the $6 mark can take the coin to $6.20. Since Polkadot was overbought, the demand for the coin could decrease.
This can cause the price to fall for a few trading sessions before it starts to rise again. In the event of a price pullback, the DOT will find its local support at $5.40 and then $5.33.
These two levels can be an entry point for buyers, as the altcoin will rise in value after touching these support lines. The amount of Polkadot traded in the last session was still in the green, indicating that the buying pressure remained.
The asset had secured a multi-month high on demand record in the past week. The coin was overvalued a week ago and as a result, the demand has receded slightly. The Relative Strength Index pulled back from the 80 mark, which was a sign of overbought value for the asset.
At press time, DOT rallied again, indicating that buying force was building again. In that sense, the DOT price was above the 20 SMA line, indicating that the buyers were driving the price momentum in the market.
The coin was also above the 50-SMA (yellow) line. Despite that, the 50-SMA line crossed above the 20-SMA line, which meant a death crossing. A death cross signifies an incoming drop in value. This reading is for traders who find an opportunity to short the asset.
The moving average convergence divergence (MACD), which represents price momentum and reversals, showed bearish buy signals. This means that the price will fall during the next trading session.
The Parabolic SAR also sides with the MACD, as the dotted lines formed above the price candle, indicating that the direction of the asset’s price was starting to turn negative. In general, the bulls could continue to dominate the price action in a shorter period of time.
Featured Image from UnSplash, Charts from TradingView.com