Disclaimer: The findings of the following analysis are the sole opinions of the writer and shouldn’t be considered investment advice
Polkadot [DOT][1] has steadily descended over the last few months. During this phase, the six-week trendline resistance (white, dashed) has curbed recent bullish revival attempts. The buyers defended the $6.5-support for over 17 months while the sellers kept finding fresher lows.
The recent rebound did help the alt break out of its falling-wedge-like structure. But the 20 EMA (red) resistance can impair DOT’S near-term recovery.
At press time, DOT was trading at $6.94, up by 3.28% in the last 24 hours.
DOT 4-hour Chart
Source: TradingView, DOT/USDT
Recent retracements pulled DOT towards its 17-month low on 13 June after a 33% three-day drop (10-13 June). Since then, the buying efforts have seen a rebuttal by the six-week trendline resistance. This fall formed a short-term falling wedge in the 4-hour timeframe.
DOT’s previous uptrend reaffirmed the chances of an upward break from the wedge. Also, the breakout day buying volumes were comparatively higher than usual.
Given the $6.5-mark support level coinciding with the patterned breakout, DOT could find some buying pressure in the coming sessions. In such a case, traders/investors need to look for a close above the 20 EMA and the Point of Control (POC, red) to time profitable entries. In this case, the buyers would aim to retest the $8-resistance.
However, an inability to break the chains of the $7-$7.3 range could continue the sluggish behavior on the charts.
Rationale
Source: TradingView, DOT/USDT
The RSI’s growth from the 35-mark has helped it retest the 44-mark resistance. To reopen robust recovery chances, the index needs to find a close above this level. Also, the bullish divergence with price provoked a slight uptick in the bearish CMF.
The MACD
