Failed Breakdown Below Key Support Sets DOT For Higher Recovery
The sustained buying interest in the crypto market has allowed the Polkadot price to remain above the $6 level. In just one week, the price has increased by almost 20% and is currently trading at $7.17. This reversal after a pullback may help DOT regain the $10 mark.
The Increased Demand Pressure at $6 Reflects Accumulation
- Market participants continue to accumulate Polkadot at discounted prices, leading to increased demand pressure at the $6 level.
- The coin price will face strong resistance levels at $7.8, $8.58, and $9.6.
- The 24-hour trading volume for Polkadot is $294.4 million, indicating an 82% gain.
Since late December 2023, Polkadot has experienced a significant decline in price, dropping from $9.59 to $5.97. This pullback erased nearly 50% of the gains from the fourth quarter of 2024 and broke below the neckline support of a Head and Shoulders pattern.
The Head and Shoulders pattern typically indicates a correction trend and selling pressure. However, with Bitcoin maintaining its price above $40,000, Polkadot quickly reversed its decline and reclaimed lost ground.
This failed breakdown could lead to forced liquidation for short positions and increase buying pressure. Currently, the DOT price is at $7.158 with a daily gain of 4.16%.
If the relief rally manages to break the overhead resistance trendline, it would confirm the end of the correction trend. This could encourage buyers to target $8.58 and $9.6.
If the rally reaches $7.8 by mid-February, there is a higher chance of reaching $10.
Technical Indicators
- Bollinger Band: A surge in the DOT price above the midline of the Bollinger band indicator would confirm a bullish trade.
- Vortex Indicator: The VI+ (blue) and VI- (pink) slopes nearing a bullish crossover indicate that buyers are regaining control of Polkadot.
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Hot Take: Polkadot’s Recovery Continues Amidst Crypto Market Surge
The sustained buying interest in Polkadot has propelled its price above $6 and resulted in a nearly 20% gain in just one week. With strong resistance levels ahead, including $7.8, $8.58, and $9.6, it remains to be seen if Polkadot can regain the $10 mark. The failed breakdown below key support levels has led to increased buying pressure and the potential for forced liquidation of short positions. Technical indicators, such as the Bollinger Band and Vortex Indicator, suggest a bullish outlook for Polkadot. Overall, Polkadot’s recovery is in line with the current surge in the crypto market.
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