- Polkadot price analysis is bearish today.
- DOT/USD rallied back to $46 resistance.
- Bullish momentum likely exhausted.
Polkadot price analysis is bearish today, as the market has approached significant resistance at $46 after a strong rally earlier in the day. As a result, we anticipate DOT/USD to decline and establish another higher low.
A parabolic extension is drawn to indicate how far momentum may have carried DOT/USD during the impulsive wave. A secondary channel is drawn to indicate how the market could range before breaking lower.
Polkadot price movement in the last 24 hours: Polkadot sets higher low, moves to $46 previous high
We believe DOT/USD has likely rallied enough for now, as momentum appears to have exhausted itself at this level, evidenced by how price has approached but not broken through the upper boundary of a secondary ascending wedge. The structure of this wedge is very similar to that of an upward sloping channel. The market may also be approaching another leg lower as it tests the first significant support at $44 again.
If this level holds, the market should resume its advance.
If not, expect DOT/USD to decline to at least $41, where it will encounter significant support at the 78.6% retracement. This area is also intersected by a Fibonacci 61.8% retracement, which could elicit further demand if Polkadot price analysis turns bearish below $45.
On the other hand, the recent upside in Polkadot price analysis was likely caused by traders closing their short positions ahead of an expected correction, which explains why momentum accelerated sharply during today’s rally. Also, note how volume has declined during both legs higher – indicating reduced supply where prices are currently trading.
If this dynamic persists, we expect DOT/USD to rebound off the $44 support level or higher, at least for one more leg higher.
However, if the price breaks below $45, it would confirm our bearish outlook on DOT/USD mentioned above.
DOT/USD 4-hour chart: DOT to reverse below $46?
On the 4-hour chart, we can see a quick move to the $46 resistance, and likely selling pressure will increase over the following hours, moving the market lower again.
On H4, the pair seems to have found a temporary top at $46. Today’s rally was likely just another impulsive wave of a more significant bearish trend. This view is supported by the lack of volume during the latest upside move. Bears are likely to on these lower volumes by driving DOT/USD below $41, which will encounter significant support at the 78.6% retracement.
Price action retracting off of the upper boundary of an ascending wedge indicates high bullish momentum, meaning that any break above $46 would be short-lived. The next major resistance is located at $54.38, corresponding to the 161.8% Fibonacci extension level. A successful long-term breach here may signal another wave higher towards $62 and beyond; however, we believe that today’s advance is likely just a corrective wave before selling resumes in Polkadot price analysis.
However, a higher low was also set, indicating bullish momentum. Polkadot price action broke past the local swing high earlier today, confirming bullish momentum. Likely, DOT/USD will set another higher low over the next 24 hours before attempting to break the $46 major resistance.
Polkadot Price Analysis: Conclusion
As stated earlier, Polkadot appears to have formed a temporary top at $46 after surging multiple times today alone. As long as the market remains above the major support at $44, then we expect the market to continue towards $50+.
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