Polkadot's Support at $5.70 Could Signal Turnaround; Analysts Eye $24 Target.
DOT Struggles at Key Levels; Recent Break from Triangle Pattern Could Fuel Rally.
With RSI Near 35, Polkadot Shows Signs of Undervaluation; Rebound Imminent?
The altcoin Polkadot (DOT) is one of the hottest topics in today's cryptocurrency market discussions. The price presently stands at $5.72, which marks a 3.49% decrease from its previous level since strong selling pressure affected the token throughout the last several weeks.
However, analysts such as Jonathan Carter suggest that DOT may be due for a recovery as it has established support following the breakdown of a descending triangle on the weekly chart. The crucial question remains: Is Polkadot capable of standing at the current levels and initiating a surge towards $24?
https://twitter.com/JohncyCrypto/status/1884243753063551250 Price Action Analysis
The cryptocurrency Polkadot saw large price fluctuations over previous weeks before increasing to $5.72 at the time of this writing. The crypto asset failed to maintain above the $7.00 resistance level and experienced an upward movement, which concluded by returning to essential support points.
The price action shows that Polkadot has been trading within support levels, now possible bounce locations. After the recent fall, the cryptocurrency has stabilized at $5.70-$5.80. This is a significant level. In the past, it has been at both the resistance and support levels.
Source: Tradingview
In the DOT chart, we have a clear example of a descending triangle, a bearish formation that was finally violated. This break of the trend line of this pattern gives a high chance of a price reversal, with support formed at the $5.70 level. The crucial point now is whether Polkadot will be able to stay above this support, for a breakdown below it could lead to more selling pressure and a DOT price decline.
Technical Indicators: RSI and MACD
From Polkadot’s technical analysis, some indications may suggest a reversal. Currently, the Relative Strength Index (RSI) is at 34.87, close to the oversold territory, which indicates that DOT is cheap and could experience an upward movement. A move beyond the 40-level on the RSI could indicate a pick-up in buying pressure, which should help to propel prices.
The Moving Average Convergence Divergence (MACD) too, gives us a glimmer of hope. Both the MACD line and the signal line are narrowing, suggesting a possibility of a bullish crossover sometime soon. If this happens, it would also strengthen the notion of price reversal. However, any failure to break through the MACD signal line could mean that the bears are still in control of the market for some time longer.
Polkadot Total Liquidation
One key aspect to monitor is the level of liquidation in Polkadot positions. Due to the recent heightened volatility, any significant push higher might lead to short covering, which can definitely enhance the bullish trend. However, if DOT falls below the $5.70 level, it will result in liquidation triggers and may lead to a further decline in the price. Such movements must be watched because they can cause a significant shift in the price of the commodity significantly.
Source: coinglass
Conclusion
Can Polkadot defend the crucial $5.70 support and pave the way for a market rebound? If it does, the cryptocurrency may attack the next resistance levels at $7, $11, $16, and perhaps $24. Nonetheless, if this support is not sustained, things may worsen. Investors and traders should therefore pay attention to these events as they will determine the future price direction of DOT in the coming days.
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