Polkadot (DOT) is currently on the verge of a critical breakout point after rebounding from a descending wedge structure. The price of DOT has shown early signs of a bullish reversal, with a TD Sequential buy signal on the 4-hour chart and a test of the descending wedge resistance. Trading at $3.66 at the moment, DOT has seen a 4.93% daily gain, indicating renewed momentum behind the move. The altcoin is now approaching the $3.82 resistance level, a crucial barrier that has consistently rejected upward attempts in the past. If bulls manage to flip this zone into support, the next leg could see DOT reaching $4.78. However, failure to break this level could pull DOT back to $3.27 and delay any sustained reversal.
The technical outlook for DOT is starting to lean in favor of the bulls, with the 9-day moving average crossing above the 21-day MA around $3.61, signaling an early bullish crossover. The Directional Movement Index (DMI) also showed an ADX reading of 31.98, confirming the presence of a strong trend. Despite the -DI still exceeding the +DI, the decreasing gap suggests that bearish pressure is gradually fading. In derivatives markets, traders are cautiously optimistic, with the Long/Short Ratio hovering at 1.0137 and 50.34% of positions skewed long. This slight bullish sentiment reflects expectations of an upside continuation, especially if DOT breaks the $3.82 ceiling.
Coinglass data revealed a cluster of short liquidations between $3.70 and $3.83, indicating a potential breakout point for DOT. A move above this range could trigger a cascade of liquidations and drive the price even higher. Spot exchange flow on April 17th further supported the bullish case, with outflows exceeding inflows by $4.56 million to $4.42 million, respectively. This suggests reduced sell pressure and possible accumulation of DOT off exchanges. Coupled with technical indicators and sentiment-driven momentum, this data reinforces the argument for a significant directional move for DOT in the near future.
All signs point towards Polkadot preparing to challenge a critical resistance zone, with indicators like the bullish crossover, rising trend strength, and exchange outflows suggesting strengthening momentum. However, the $3.82 resistance remains the final barrier to overcome. If DOT successfully breaks and holds above this level, the rally could accelerate towards $4.78. On the other hand, another rejection at this level could stall the breakout and reintroduce short-term bearish pressure. Overall, it seems that DOT is on the cusp of a significant move, and traders are cautiously optimistic about its potential for a bullish continuation.
