Polkadot: Holding this price level will be key for bullish outlook
Disclaimer: The findings of the following analysis are the sole opinions of the writer and should not be taken as investment advice
Polkadot’s price action has looked solid over the last 30 days, clocking gains of over 110%. On the charts, the alt did not falter despite several hurdles presented in its path to its mid-May levels. However, there seemed to be some near-term risks that could limit DOT’s upside.
These were present at the 200-SMA (green) and swing highs of $28 and $31. Considering these challenges, traders should brace for an interesting week ahead. These developments could have a radical impact on DOT’s mid-long term trajectory.
Polkadot Daily Chart
Buyers have not been disappointed in the DOT market. Sustained upwards pressure forced the price to rise above the daily 20-SMA (red) and 50-SMA (yellow), both of which are often used to gauge the level of market momentum. The last stand in the uptrend lay at the 200-SMA (green) which would validate DOT’s staggering comeback from its late-July lows.
Furthermore, expect market skeptics to be totally out of the picture when the price closes above $31. In fact, the 200-SMA had the potential to negate a bullish thesis. A double top formation also seemed vulnerable to a breakdown if DOT peaks at $28.6 and fails to close at a higher level. In such a case, the focus would shift to the defensive zone of $18.4-$19.4 – The baseline for bullish control.
The Relative Strength Index has peaked in the overbought zone for the past few days. It requires immediate stabilization before the next leg upwards. While the RSI heightened the chances of a near-term decline, expect buyers to respond quickly.
The MACD has traded above the half-line for over two weeks – A sign of bullish strength. Finally, the Awesome Oscillator was at its highest level in over 4 months. Such a buildup was last observed in early April when DOT snapped a high of $46.7.
Polkadot can be expected to continue its upwards journey in the coming weeks. The indicators held bullish positions, although a near-term retracement seemed likely. In such a case, DOT will need to sustain losses above $18.4 to preserve a favorable outlook.
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