Polkadot (DOT): Buyers Should Closely Watch This Resistance Zone to Stay Profitable
Polkadot has strived to alter its long-term pessimistic outlook for more than eight months. However, the past two weeks shed some hope as the alternative token secured a spot beyond the Bollinger Bands’ basis line.
As the latest growth propelled DOTE toward the immediate supply territory at $8.6 – $9.1, sellers might pose short-term obstacles for the token. While publishing this blog, DOT changed hands at $8.62, gaining 4.81% within the past 24 hours.
Polkadot Daily Timeframe
The resurgence from the altcoin’s 18-month lows on July 13 reignited the short-term buying momentum. This renewed momentum bolstered Polkadot to flip a 4-month trend-line resistance to support.
Meanwhile, DOT has extended a bullish volatile break within the previous few weeks. Consequently, the altcoin stayed around the BB’s upper band. Polkadot might witness a short-term setback should the prevailing candle reverse from the resistance range at $8.6 – $9.1. Such developments would have possible targets around the $7.3 mark near the BB’s basis line.
Investors should consider reversals from the nearest resistance area to discover the possibility of this short-term plunge. Meanwhile, the resistance at $9.8 might short-live premature bull runs or bearish invalidations.
Reasoning
The RSI (Relative Strength Index) exhibited a bullish outlook after dodging sideways actions for almost one month, confirming buyer favoritism. Sellers should test and ultimately breach the support floor at 56 to cancel this bullish stance.
Nevertheless, the CMF (Chaikin Money Flow) witnessed lower highs as the price actions printed higher peaks. That confirmed a bearish divergence with DOT price. Also, the Volume Oscillator mimicked the Chaikin Money Flows and affirmed a bearish divergence.
Final Thought
Considering indicators’ bearish divergences, Bollinger Band’s overbought readings, and the nearest resistance range, DOT might witness a short-term drop before regaining upside momentum. Price targets would stay as mentioned above. Nevertheless, enthusiasts should assess broad market sentiments to compliment the technical indications and execute profitable deals.
The crypto market battled to retain the latest gains during this publication, with BTC’s gradual drop pinning it at $23,759. Also, Ethereum seems weak at the $1.7K level, changing hands at $1,698. That confirms possible downtrends before another upside.
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