Polkadot Nears Key Resistance Amid Mixed Signals
Key Takeaways
- Polkadot (DOT) is approaching a critical resistance level at USD 5.30.
- A breakout could pave the way toward USD 8.00 and beyond.
- Technical indicators like the MACD suggest bullish momentum.
- A drop below USD 5.09 could trigger a correction down to USD 4.00.
- However, on-chain data indicates declining network activity.
Resistance at USD 5.30 – Decision Point Approaching
Polkadot (DOT) recently recorded a daily gain of around 10%. At the same time, trading volume rose by more than 19%. Currently, the price is sitting at approximately USD 5.07, bringing the critical resistance zone at USD 5.30 into focus. Should DOT break through this level sustainably, the price could move toward USD 8.00. A further rise up to USD 11.67 would then be possible.
However, if the price fails to break through the USD 5.30 mark, a correction could follow. In that case, DOT could initially fall to USD 4.70. In a worst-case scenario, a pullback to between USD 4.30 and USD 4.00 would be possible.
Technical Analysis: MACD Shows Bullish Signals
The MACD (Moving Average Convergence Divergence) recently generated a buy signal. The MACD line crossed above the signal line, indicating increasing buying pressure. The histogram bars are also rising – another sign of bullish momentum.
This technical development confirms the breakout from a longer accumulation phase. However, the area around USD 5.30 remains a critical point. A false breakout is possible, especially if trading volume does not increase along with the price.
Liquidation Data: Long Positions Dominate
A look at the liquidation map shows that many traders are betting on rising prices. Between USD 4.54 and USD 5.09, there are numerous leveraged long positions – in some cases with 25x or 50x leverage. This indicates a high risk if the price falls.
The area around USD 5.14 lies just below the resistance at USD 5.30. Many long positions could be closed here if the price fails to rise further. A short-term move to USD 5.30 could be supported by short liquidations. However, the volume of short positions remains relatively low, indicating weak downward pressure.
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On-Chain Signals: Network Activity Declining
Despite the positive price movement, the number of active addresses on the Polkadot network is falling. It currently stands at around 62,100. This decline suggests waning interest or reduced network usage. Such developments can weaken the fundamental support for a sustained price increase.
Our Assessment
Polkadot is entering a decisive phase. The area around USD 5.30 acts as a key level. A clear breakout above it could initiate a new upward trend. Technical indicators support this, but the declining network activity calls for caution.
If you are invested in DOT or planning to enter, closely monitor the price action around USD 5.30. Trading volume and liquidation levels also provide clues about potential movements. In the long term, Polkadot remains an exciting project, but in the short term, increased volatility is to be expected.
Sources
- TradingView
- CoinGlass
- CoinMarketCap
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