According to CryptoPotato, Polkadot has been struggling to reclaim the critical $7.5 resistance region and the 100-day moving average at $7.4. Despite the current bullish momentum, it seems insufficient, suggesting a possible short-term consolidation near this pivotal level. After a resurgence of demand near the $6.5 support level, Polkadot experienced a bullish surge, bringing it to a critical resistance zone defined by the 100-day moving average and the static level at $7.5. However, the current price action around the $7.5 mark indicates fading bullish momentum. Buyers are facing significant challenges pushing the price beyond this resistance, leading to a likely sideways consolidation or slight rejections before the next decisive move. In this scenario, the $6.4 level will be the primary support in the mid-term.
On the 4-hour chart, the decrease in bullish momentum is evident upon reaching a significant resistance zone, with the price failing to breach its prior swing high. This critical resistance range is bounded by the 0.5 ($7.415) and the 0.618 ($7.821) Fibonacci levels. However, forming a potential double-top pattern near this resistance suggests a possible short-term rejection. Should buyers overcome the substantial resistance at $7.8, the next target would be the upper boundary of the wedge in the mid-term. Conversely, a rejection at this level could lead to another downward move, targeting the wedge’s lower boundary. A decisive breakout from this wedge pattern will be necessary to determine Polkadot’s future direction.
Polkadot’s price has shown signs of waning bullish momentum, failing to breach the previous swing high of $7.7. Analyzing the futures market sentiment is crucial in determining whether this uptrend will continue, as futures market activity significantly influences price movements. Despite the recent bullish move, open interest and funding rates have remained near their lowest levels, showing no significant increase. This indicates a lack of strong bullish momentum and raises the possibility of a consolidation correction. This suggests that market participants are not increasing their long positions significantly, indicating a lack of confidence in continuing the uptrend. Given the dormant funding rates and low open interest, the likelihood of a consolidation correction increases. This means that Polkadot may enter a period of sideways movement or slight declines before determining its next direction. Nevertheless, if the open interest and funding rates increase, this would signal renewed bullish momentum. An uptick in these metrics would indicate that traders are gaining confidence and entering more aggressive long positions, potentially solidifying the uptrend.
