Polkadot Price Analysis: DOT Tumbles 7% Weekly but the Bulls May Be Staging a Comeback

Polkadot’s price has been dropping rapidly over the last couple of months and is yet to show any sign of slowing down. However, the cryptocurrency might soon begin a bullish rebound.

Technical Analysis

By TradingRage

The Daily Chart

On the daily chart, the price has been on an aggressive decline since a rejection from the $12 resistance level. The market has also broken below the bullish trendline that has been formed since October 2023.

The 200-day moving average, located around the $7 mark has also been broken down, with the price seemingly targeting the $4 support zone.

With the Relative Strength Index also showing values below 50%, the momentum is in favor of a further bearish continuation.

Source: TradingView

The 4-Hour Chart

The 4-hour chart paints a much more clear picture of the recent price action. The market is seemingly forming an ascending channel pattern at the moment.

These formations are normally considered bearish continuation patterns inside a larger downtrend.

Therefore, if the channel breaks down, the market would be more likely to crash toward the $4 support zone. On the other hand, a breakout above the channel can completely overturn the scenario, and the market could begin a bullish trend.

Therefore, the short-term fate of the market relies heavily on whether the channel is broken to the upside or downside.

Source: TradingView

Sentiment Analysis

By TradingRage

Polkadot Liquidation Heatmap

While the technical analysis of the DOT price chart suggests that we are in a clear bearish trend, the futures market data hints at a potential rebound in the short term.

This chart demonstrates the Binance DOT/USDT pair’s liquidation heatmap. It is evident that tons of liquidity were located below the $6.5 level, which the price has recently dropped below. Therefore, it could be interpreted that the demand has absorbed this supply as the market is not dropping lower anymore.

Currently, a potential liquidity pool for the price to target is located above the $7 level. As a result, the price could at least experience a short-term pullback toward this level.

Source: Coinglass

The post Polkadot Price Analysis: DOT Tumbles 7% Weekly but the Bulls May Be Staging a Comeback appeared first on CryptoPotato.

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