According to CryptoPotato, Polkadot has recently found support within a pivotal zone, which includes the price range defined by the 0.5 ($8.9) and 0.618 ($8.2) Fib retracement levels and the influential 100-day moving average. This development, following a period of consolidation correction, suggests a potential bullish revival in the medium term.
The daily chart shows that Polkadot experienced a significant uptrend after breaking above the 100 and 200-day moving averages in early November 2023. This surge led to a yearly high of $11.9, indicating a prevailing bullish sentiment with buyers dominating the market. However, this rise was met with considerable selling pressure around the $11.9 resistance zone, leading to an extended corrective retracement towards a robust support region. This region is largely defined by the Fibonacci retracement levels of 0.5 ($8.9) and 0.618 ($8.2), coinciding with the prominent 100-day moving average, making it a strong barrier to sellers. The convergence of these support levels suggests a pronounced demand at this critical juncture, potentially impeding further downward movement. However, DOT’s immediate objective remains the pivotal $10 resistance level upon a bullish rebound.
A detailed examination of the 4-hour timeframe reveals an extended consolidation correction following a robust uptrend that pushed DOT’s price to the $11.9 threshold. This phase saw a significant breach below the multi-week ascending trendline, likely triggered by profit-taking and liquidation of long positions. However, upon reaching the key support level at $8, the cryptocurrency experienced intensified buying pressure, sparking a modest reversal. Nonetheless, the recent rebound could be seen as a minor retracement, possibly aimed at completing a pullback toward the breached trendline near the crucial $10 mark. Should the price fulfill this pullback, the prospect of a bearish retracement aiming to breach the decisive $8 support region becomes plausible. Nevertheless, DOT appears to be confined within the price range bounded by the critical support at $8 and the notable resistance at $10 until a decisive breakout occurs.
The impact of futures market sentiment on Polkadot’s price trajectory is significant, with historical evidence indicating that the intensity of these positions and the potential for substantial liquidations have been primary drivers of notable fluctuations. The ratio of long to short positions is valuable for traders seeking insights into future price dynamics. The metric has recently undergone a significant reversal, exhibiting a consistent uptrend and reaching its highest recorded values. This pattern suggests a prevailing bullish sentiment in the futures market, with a majority of participants favoring long positions in aggregate. Consequently, this outlook implies that Polkadot is poised to embark on a robust bullish trajectory following the ongoing consolidation phase.