Polkadot (DOT) is currently experiencing a period of consolidation, hovering around the crucial $6.3 mark and the 200-day moving average. Technical analysis reveals an ascending wedge pattern, a bearish continuation signal, suggesting potential seller dominance. If sellers breach the wedge's lower boundary, a downtrend towards the $5.1 support level is likely. However, a bullish shift could see buyers targeting the 100-day moving average, currently around $8.1.

On the 4-hour chart, DOT's recent downtrend found support near the $6 region, prompting a bullish reversal. However, the price has met resistance at the 0.5 ($7.4) and 0.618 ($7.8) Fibonacci levels, indicating substantial selling pressure. Despite this, Polkadot's price remains within a critical range, between the $6 support and $7.4 resistance levels. A surge above these Fibonacci levels could signal a bullish resurgence.

Sentiment analysis shows a significant number of long positions were liquidated during the recent downturn, leading to a long-squeeze event. This resulted in a decline in the Open Interest metric, indicating a cooling-down phase in the perpetual markets. The futures market appears ready for both long and short positions, potentially leading to significant price movement in the mid-term.