Polkadot’s trend-line resistance has assumed a crucial value for almost four months. This resistance has underpinned the alternative token on southbound movements for over two months. Moreover, the 20 Exponential Moving Average has curtailed buying efforts amidst the slumping phase.
Thus, a bounce back from 38.2% may plat the altcoin for near-term setbacks on the price chart. DOT should trigger buying momentum resurged from the $6.45 long-term support to avoid an immense fallout. The alt battled with bearishness at $6.64 during this publication.
Polkadot Daily Timeframe
The prevailing sell-offs dragged Polkadot towards 18-month lows on July 13, following a more than 44% decline in 42 days. Post that, buying momentum has steadied DOT beyond its long-term foothold. Nevertheless, the 20 Exponential Moving Average and the trend-line resistance controlled the asset’s peaks.
Polkadot has been stretching its compression period. The current candle closing beneath 38.2% would affirm the potential of near-term slumps on the price chart. Meanwhile, investors and traders should watch for reversals from $6.9 for the chances of DOT maintaining its dropping historical tendency. That would see potential targets at $6.45, following an approximately 10% drop. Any premature bull run or bearish invalidation might witness short-lived rallies until $7.3.
Reasoning
Polkadot bulls have battled to overcome the 45-level after the Relative Strength Index attempted to dodge its sideways trend for almost a month. Buyers should secure a position beyond the midline to change DOT’s bearish narrative.
The on-balance volume could not peak lower even with the price recording lower highs. That showed a slight bearish divergence with DOT prices within the past few days. However, the ADX flashed a weak directional bias for the alternative token.
Final Thought
Considering the confluence by the 38.2% mark and the 20 Exponential Moving Average plus the trend-line resistance, Polkadot’s DOT might stretch its bearish tendencies. Price targets would stay as debated above. Lastly, enthusiasts should evaluate broad market sentiment to complete the technical indications and ensure profitable undertakings. Keep in mind that bears have dominated crypto this year, triggering short-lived rallies.
Stay tuned for the latest developments in the cryptocurrency market.