- Polkadot price analysis is bullish today.
- DOT/USD rallied back to $49 resistance.
- Bullish momentum likely exhausted.
Today’s Polkadot price analysis is bearish, as the market has approached significant resistance at $55 after a strong rally earlier in the day. As a result, we anticipate DOT/USD to drop and establish another higher low.
The sharp drop in DOT/USD occurs during the impulsive wave when momentum begins to exhaust. A parabola is drawn to show how far momentum may have carried the currency during this sudden wave. A secondary channel is shown to indicate where the market could range before declining.
Polkadot price movement in the last 24 hours: Polkadot sets higher low, moves to $52 previous high
According to our technical analysis, we believe DOT/USD has rallied enough for now. Price has approached but not broken through the top barrier of a secondary rising wedge, suggesting that momentum has run its course at this level and that price is approaching another leg lower as it tests the first strong resistance at $49 once again.
If this level holds, the market should resume its advance. If not, the next significant support level is at $44.
On the other side, traders closing their short bets ahead of an anticipated downturn might explain why momentum accelerated dramatically during today’s rally, according to recent price appreciation. Also, note how volume has dropped during both legs up, showing less supply on offer at current prices.
We maintain a positive outlook for DOT/USD if it can break above $52 but anticipate further consolidation at the very least.
DOT/USD 4-hour chart: DOT advances to $50
We can see a brief advance to $50 resistance on the four-hour chart, and selling pressure is likely to increase over the following hours, pushing the market lower once again.
The pair hit a high of $46 on H4, but the pair may have found a short-term top at this price. Today’s rally was most likely another impulsive wave in a long bearish trend. This viewpoint is bolstered by the lack of activity seen during today’s upswing. Bears will be driven to these lower prices by the increasing volume in the sell-off.
If buyers manage to break above $50, we could see a short-term rally, but nothing too significant. The market seems to be favoring the bears at this point.
As shown on the chart, a flag pattern is forming that hints at a lack of momentum and a possible drop. The flag is fairly standard, consisting of a descending triangle that projects to at least $46.
The pair has already dropped to the lower boundary of the flag; if this level holds, an impulse towards $45.50 may be seen after another small consolidation period.
However, a higher low was also established, suggesting upward momentum. Later today, the Polkadot price action broke past the previous day’s swing high, showing further bullish momentum. DOT/USD is expected to establish another higher low over the next 24 hours before attempting to break $55 significant resistance.
Polkadot Price Analysis: Conclusion
We are maintaining our short-term neutral position on the market, for now, waiting to see how the price reacts around $55.
Our long-term outlook is bullish, with an expected retracement soon. As shown by the parabola of momentum earlier in the article, there was a sharp decline in volume during today’s rally, suggesting that the market will soon move sideways for at least a few hours.
If the price closes above $55 today, we maintain our long-term bullish outlook on the Polkadot/USD pair. On the other hand, if the price drops below $52, we expect more short-term consolidation before the market resumes its downward trajectory.
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