Polkadot price broke above the $5 resistance mark in recent trading sessions. Over the past 24 hours, DOT has appreciated 3.8%. The price of Bitcoin has risen, causing other altcoins to rise on their respective charts.
When Bitcoin broke through the $18,000 mark, other altcoins broke above their immediate resistance marks. Polkadot price momentum remains bullish in a shorter time frame. The technical outlook for DOT showed that despite a price correction, the accumulation on the chart has increased.
Polkadot demand also showed an increase on its chart. The price of the asset needs to stay above the $5.40 support line and cross the $6.20 resistance level if the coin is to hold a bullish position for a longer period.
The DOT daily chart also indicates an impending price decline, which means traders could be presented with short selling opportunities. Currently, DOT is trading at an 89% discount from its 2021 all-time high of security.
Polkadot Price Analysis: One-Day Chart
DOT was trading hands at $5.89 at the time of writing. Polkadot had formed a cup and handle pattern, meaning the bullish momentum may continue, which is why Polkadot resumed its northward journey on the daily chart.
The air resistance of the coin stood at $6. Reversing the $6 mark can take the coin to $6.20. As Polkadot was overbought, demand for the coin could plummet.
This can cause the price to drop for a few trading sessions before it starts rising again. In the event of a price retracement, the DOT will meet its local support at $5.40 and then at $5.33.
These two levels can be an entry point for buyers, as the altcoin will rise in value after touching these support lines. The amount of Polkadot traded in the last session was still green, indicating that the buying pressure continued.
The asset had hit a multi-month high as it recorded demand last week. The coin was overvalued a week ago, and as a result, demand fell slightly. The relative strength index fell back from the 80 mark, which was a sign that the asset was overbought.
As of press time, the DOT has once again registered a slight rise, indicating that buying strength is once again strengthening. On that note, DOT price was above the 20-Simple Moving Average line, suggesting that the buyers were driving the price momentum in the market.
The coin was also above the 50-SMA line (yellow). Despite this, the 50-SMA line crossed the 20-SMA line, which meant a death cross. A death cross signifies an impending drop in value. This reading corresponds to traders finding the opportunity to sell the asset short.
The Moving Average Convergence Divergence (MACD), which describes price momentum and reversals, showed declining buy signals. This means that the price will drop during the next trading session.
The Parabolic SAR also sides with the MACD when the dotted lines formed above the price candlestick, indicating that the price direction of the asset was beginning to turn negative. Overall, the bulls could continue to dominate the price action in a shorter time frame.
Featured image from UnSplash, charts from TradingView.com