Polkadot price posted significant gains over the past week after Bitcoin showed a recovery on its chart. Other altcoins have also moved in the same direction. At the moment though, DOT has been trying to break the immediate resistance at $5.
In the last 24 hours, the DOT noted a 2% drop, but that could be attributed to a slight drop in demand for the altcoin. The technical outlook for Polkadot remains bullish. Buyers and demand for the altcoin have to continue to rise, and soon the DOT will travel above the $5 level to trade near the $6 level.
Accumulation has been building over the past week as buyers have outpaced sellers at press time. However, it is critical that the DOT breaks above the $5 mark, or the coin will start trading lower, causing a loss of investor interest.
The market structure for DOT remains bullish, as the coin managed to turn some resistance marks into support levels last week. A push from the buyers will no doubt strengthen the efforts of the bulls to cross the stiff price top of $4.90. Polkadot’s price is trading 91% below its all-time high assured in 2021.
Polka Dot Price Analysis: One-Day Chart
DOT was trading at $4.90 at press time. The $4.90 price level was a strong resistance point for the altcoin. Although DOT managed to break above the $4.80 resistance level, which has proven to be a difficult resistance mark in the past, the coin continues below the $5 level.
The $5 mark is crucial, as the 78.6% Fibonacci retracement level is also somewhere with the coin at that mark. A push above $5 will take the coin above $5.20.
On the other hand, a bearish momentum and the DOT will land at $4.40 and then $4.16. The amount of DOT traded in the last session decreased slightly, reflecting the smaller decline in the buying force.
Technical analysis
DOT made a significant pick-up in buying pressure over the past week. The Relative Strength Index spiked above the 60 mark, signifying the uptrend on the chart.
Similarly, the asset price moved above the 20 simple moving average (SMA) line, which meant that buyers were driving price momentum in the market.
Polkadot was also very close to the 50-SMA line, and only a slight push from the buyers would help the price crash. A move above the 50 SMA will trigger another significant rally for Polkadot.
Following the surge in demand, technical indicators pointed towards a buy signal for the coin. This usually means that the currency is heading up. Moving Average Convergence Divergence (MACD) indicates price momentum and reversal.
The indicator painted green signal bars, which were buy signals for DOT. The directional movement index was positive because the +DI line (blue) was higher than the -DI line (orange). The Average Directional Index (red) was above 20, which meant that the current price action was gaining strength.
Featured Image from Unsplash, Charts from TradingView.com
