According to CryptoPotato, Polkadot's price has recently been fluctuating within a specific range, bouncing from the lower boundary at $6.4 and reaching the upper threshold, which aligns with a significant resistance area. This movement has led to expectations of a minor rejection, with the price potentially targeting the lower part of the range.
Upon detailed examination of the daily chart, Polkadot appears to be moving sideways, oscillating between the notable support level of $6.4 and the crucial resistance at $7.4. This has left the market in a state of uncertainty regarding its future direction. Recently, Polkadot found support near the lower boundary of the range at $6.4, prompting a bullish upswing. However, this momentum waned upon reaching the upper boundary at $7.4, which also coincides with the critical 200-day moving average, resulting in a minor rejection. This indicates a balance between buyers and sellers, potentially leading to continued consolidation until a valid breakout occurs. Nonetheless, a minor downtrend is anticipated in the short term, targeting the crucial $6.4 level.
Analyzing the 4-hour timeframe, Polkadot’s price has been confined within a decisive range, with support near the pivotal $6 level and resistance around the $7.4 threshold. However, there are no clear signs indicating its next move. Following a period of upward movements, the price once again encountered the critical resistance zone delineated by the 0.5 ($7.4) and 0.618 ($7.8) Fibonacci levels. The current action near this pivotal resistance suggests potential seller dominance and insufficient bullish momentum, possibly leading to another bearish rejection. As a result, the price is expected to decline, with the next target being the lower boundary of the range.
Amidst the recent price uncertainty surrounding Polkadot’s potential trajectory, analyzing futures market sentiment becomes crucial for participants to anticipate the cryptocurrency’s future prospects. The chart provided showcases the Open Interest and Funding Rates metrics alongside Polkadot’s price in the daily timeframe. Observing the graph, it’s evident that following a recent decline and subsequent sideways consolidation, both the OI and funding rates metrics have experienced significant declines, reaching their lowest values. A similar pattern was observed in early 2024 when Polkadot’s price was at the current level, ultimately resulting in heightened demand and the initiation of a robust bullish trend. With both metrics experiencing notable declines, the futures market appears primed for the aggressive implementation of futures positions, potentially leading to a significant move. Consequently, if the current consolidation phase concludes with intensified demand and the implementation of long positions, the market is poised to embark on a notable bullish trend, targeting higher price levels.