- Polkadot may have potential for a bullish trend, but buying pressure has been weak
- Liquidation heatmap and Fibonacci levels seemed to be in agreement
Polkadot [DOT], at press time, exhibited bullish signs on the lower timeframe charts and seemed to be preparing to break past the $4.2-local resistance level. Bitcoin [BTC] was trading above the $92k-level as well, spurring bullish belief among altcoins.
An analysis last week revealed that the $3.8-level was a key level to flip to support. DOT‘s bulls have achieved this since then. Now though, they may have more ambitious plans.
Polkadot retains a bearish swing structure, but traders can be hopeful
Source: DOT/USDT on TradingView
The swing structure in question on the 1-day chart was captured by the Fibonacci retracement levels. The high at $4.76 must be beaten to shift the structure bullishly. Meanwhile, the $4.18 and $4.44 levels were the key nearby resistances.
The A/D indicator has been flat over the past month. The lack of uptrend meant buying pressure was weak, and was a hint that bulls might not be ready to drive an uptrend. At the time of writing, the Awesome Oscillator was still below the zero line – A sign that momentum was not bullish on this timeframe yet.
The DMI also reflected a lack of a clear trend, with both the -DI and +DI below 20. The price action and the technical indicators noted wariness from market participants over the past week.
Source: DOT/USDT on TradingView
Zooming in, the bullish momentum seemed to be clearer.
The price has set a series of higher highs and higher lows over the past two weeks, forming a bullish structure. The DMI also reflected a strong uptrend in progress, with the A/D’s uptick hinting at greater demand for Polkadot.
Source: Coinglass
The liquidation heatmap also highlighted the risks of entering long positions now. The $4-$4.18 and the $4.3-$4.4 regions are both magnetic zones for the price. They could pull DOT higher, but they also pose the risk of a bearish reversal thereafter.
With the 1-day structure not yet bullish, traders in a long position can look to book profits at the $4.18 and $4.44 resistance levels. A surge beyond these two levels, and a retest of $4.44 or $4.76 as support, could be used to enter long positions for the next upward move.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion