Analyzing if DOT bulls can clinch near-term gains before a pullback

0
8

 268 total views

Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be considered investment advice.

Like most coins, Polkadot [DOT] has been on a persistent decline over the last few months. During this phase, the two-month trendline resistance (yellow, dashed) has kept a check on the recent bullish revival attempts.

The current price setup took an interesting stance. A rebound from its long-term support can position the alt for near-term revival. 

While the broader market structure plays out in favor of the sellers, losing the $7-mark support can expose DOT to a further downside in the coming sessions.

At press time, DOT traded at $7.25, up by 8.59% in the last 24 hours.

DOT Daily Chart

Source: TradingView, DOT/USDT

The recent drawdowns pulled DOT toward its 17-month low on 13 June after an over 32% three-day decline (10-13 June). Post this, the buying pressure seemingly saw a spike. Thus, the alt marked a bullish hammer on the daily timeframe after a streak of red candles.  

The alt’s symmetrical triangle breakdown carved a path to test the eight-month trendline support (white, dashed). Should the current candlestick close above the hammer, it would confirm the short-term buying pressure.

Traders/investors should watch for the close beyond the $7.5-level to assess the effectiveness of the buying strength. With a confluence of the $7.03-support, trendline support, and the bullish hammer resistance (white, dashed), the alt could see short-term recovery toward the $8.6-zone. 

An inability to close beyond the $7.3-level could intensify the sluggish behavior in the coming sessions. A broader market collapse below the $7-level would expose DOT to a further 8-10% downside.

Rationale

Source: TradingView, DOT/USDT

After consistently trying to break the bonds of the 44-mark, the RSI fell back into the oversold region. Potential growth from here could aid DOT’s short-term recovery prospects.

However, the MACD lines continued to depict a strong bearish edge in the current market dynamics. Further, with the -DI line finally looking south, DOT could register near-term ease in selling pressure.  

Conclusion

Given the multiple support confluences at the $7-region alongside the bullish hammer, a potential near-term recovery could see a reversal from the $8.6-region. In this case, buyers must wait for a close above the $7.3-mark.

However, an overall market sentiment analysis becomes vital to complement the technical factors to make a profitable move. A close below the $7-support can spiral into undesired losses.

Adblock test (Why?)

Disclaimer:

Blockcast.cc does not endorse any content or product on this page. While we aim at providing you all important information that we could obtain, readers should do their own research before taking any actions related to the company and carry full responsibility for their decisions, nor can this article be considered as investment advice or recommendations. Every investment and trading move involves risk, you should conduct your own research when making a decision.