Polkadot price broke the $5 resistance line in the past trading sessions. In the last 24 hours, DOT has appreciated by 3.8%. The price of Bitcoin surged, causing other altcoins to move up their respective charts as well.
As Bitcoin breached the $18,000 price barrier, other altcoins broke their immediate resistance levels. Polkadot price dynamics remain bullish in the shorter term. The technical outlook for DOT showed that despite the price correction, the accumulation on the chart increased.
Polkadot demand also showed an increase on its chart. The asset price needs to stay above the $5.40 support line and break the $6.20 resistance level if the coin is to maintain a bullish position for an extended period of time.
The daily DOT chart also points to an incoming price drop, which means traders may be presented with shorting opportunities. DOT is currently trading at an 89% discount from its all-time high secured in 2021.
Polkadot Price Analysis: One Day Chart
DOT was changing hands for $5.89 at the time of writing. Polkadot has formed a cup and handle pattern, which means the bullish momentum can continue, which is why Polkadot has resumed its northward path on the daily chart.
The overhead resistance of the coin was $6. A break below the $6 mark can take the coin to $6.20. As Polkadot was overbought, demand for the coin may have dropped.
This can cause the price to fall for several trading sessions before it starts to rise again. In the event of a price retracement, DOT will hit its local support at $5.40 and then $5.33.
These two levels can be an entry point for buyers as the value of the altcoin will increase after it touches these support lines. The volume of Polkadots traded in the last session was still in the green, indicating that buying pressure remains.
The asset secured a multi-month high in registered demand last week. The coin was overvalued a week ago and as a result demand has returned slightly. The Relative Strength Index fell from 80, which was a sign that the asset was overbought.
At press time, the DOT was up again, indicating that purchasing power is building again. In this context, the price of DOT was above the 20 simple moving averages, which indicated that buyers were driving the price dynamics in the market.
The coin was also above the 50-SMA (yellow). Despite this, the 50-SMA crossed above the 20-SMA, signifying a death cross. The death cross means an incoming decrease in value. This figure corresponds to traders who found an opportunity to short the asset.
Moving Average Convergence Divergence (MACD), which displays price dynamics and reversals, has shown bearish buy signals. This means that the price will drop during the next trading session.
The Parabolic SAR also stands on the side of the MACD as the dotted lines have formed above the price candlestick, indicating that the price direction of the asset has turned negative. Overall, bulls could continue to dominate price action in the shorter term.
Featured image from UnSplash, charts from TradingView.com