Here’s what Polkadot holders can expect following this breakout.
Can Polkadot maintain its upward trajectory?
The price action of DOT has created an ascending channel.
- Any further break below the channel’s lower boundary could lead to a retest of the $4 support area.
Polkadot [DOT] has been trading in a classic upward channel structure over the past few weeks, indicating a potential upward edge in the short term. However, the price recently faced resistance at the $4.9 level and has since consolidated between the 20-day and 50-day EMAs.
As of the time of writing, DOT was trading at around $4.58, down about 4% in the last 24 hours. This price action puts DOT at a critical juncture as the altcoin tests the lower boundary of the upward channel.
Can Polkadot maintain its upward trajectory?
Source: TradingView, DOT/USDT
After rebounding from its long-term support at $3.9, DOT has witnessed a steady bullish ascent, increasing over 21% in the past three weeks. However, the recent rejection at the $4.9 resistance has led the price to re-evaluate in the $4.5–4.6 range, just below the 50-day exponential moving average.
Given the upward momentum in the past month, DOT buyers ideally want to maintain the price above the $4.5 level to keep the bullish trend alive. If the bulls defend this area, we could see the psychological level of $5, with the next major resistance around $5.55.
On the other hand, a sustained move below $4.5 could open the doors for a deeper retracement toward the $3.9–4.1 support range. This support zone has already provided a solid foundation for buyers to re-enter the market.
The RSI stood at 53 at the time of publication, indicating a relatively neutral position. If it drops below 50, it could signal a loss of momentum for the bulls and increase the likelihood of a short-term correction.
The price has been hovering around the 20-day exponential moving average ($4.52) and the 50-day exponential moving average ($4.59). A break below these levels could trigger downward pressure, while a bounce from here is crucial to maintaining the bullish narrative.
Derivatives data showed this.
Source: Coinglass
The volume saw a sharp increase of nearly 70% (to $182.67 million), while open interest slightly decreased by 0.54% to $216.71 million over the past day. This indicates an uptick in speculative activity, albeit with caution among traders, as open interest remained relatively stable.
The long/short ratio across exchanges showed a slight short bias at 0.9004, indicating some bearish sentiment.
However, the long/short ratio on Binance for DOT/USDT was 4.102, suggesting that top traders predominantly hold long positions and are betting on a potential price recovery.
Polkadot traders should keep an eye on Bitcoin’s movements and assess overall market sentiment to gauge the next move for the altcoin.
