Polkadot, currently showcasing bullish signs on the lower timeframe charts, is on the verge of breaking past the $4.2-local resistance level. Bitcoin trading above the $92k-level is supporting the bullish sentiment among altcoins. Last week’s analysis highlighted the importance of flipping the $3.8-level to support, a feat achieved by DOT’s bulls. Now, they are eyeing more ambitious plans despite the bearish swing structure still in play.
The Fibonacci retracement levels on the 1-day chart indicate that the $4.76 high needs to be surpassed to shift the swing structure bullishly. The nearby resistances at $4.18 and $4.44 are crucial levels to watch. The lack of an uptrend reflected by the A/D indicator suggests weak buying pressure, indicating that bulls may not be fully ready to drive an uptrend. Additionally, the Awesome Oscillator below the zero line indicates a lack of bullish momentum at the moment. The DMI also shows a lack of a clear trend, with both the -DI and +DI below 20.
On a closer look, the bullish momentum appears more evident with Polkadot forming a series of higher highs and higher lows over the past two weeks. The DMI also confirms a strong uptrend, with an uptick in the A/D hinting at increasing demand for Polkadot. However, the liquidation heatmap warns of risks associated with entering long positions now, with the $4-$4.18 and $4.3-$4.4 regions posing as magnetic zones for the price. These levels could either propel DOT higher or lead to a bearish reversal.
Traders in a long position should consider booking profits at the $4.18 and $4.44 resistance levels, as the 1-day structure is not yet fully bullish. If the price manages to surge beyond these levels and retests $4.44 or $4.76 as a support, it could be a good entry point for the next upward move. It is important to note that the information presented does not constitute financial or investment advice and is solely based on the writer’s opinion.
