Polkadot’s price has been stuck in a tight range near the $6.5 threshold, a crucial level that has provided support in recent months. As the price consolidates, analysts are eyeing a potential bullish reversal in the short term.
According to technical analysis, the daily chart shows Polkadot’s bearish momentum has faded after reaching the $6.5 support level. This pivotal level is accompanied by substantial demand, which could potentially overcome the ongoing supply. The price is trapped within a critical range, bounded by the $6.5 support and a multi-month dynamic descending trendline. A breakout from this range will likely determine the price’s next move in the short term.
On the 4-hour chart, Polkadot experienced a significant increase in demand near the $6.2 mark, leading to an impulsive surge toward the short-term local resistance of $6.8. However, the price then faced selling pressure, resulting in a retrace. The $6.8 local resistance serves as the last supply zone before the initial breakout of the wedge pattern, and the recent rejection from this level indicates a valid pullback to the broken level, highlighting the ongoing bearish sentiment in the market.
Despite this, the price appears confined to $6.2 support and $6.8 resistance. A breakout from this range will likely clarify the upcoming price direction.
Sentiment analysis reveals that the $6.5 level is filled with demand, having supported the price multiple times. The Binance liquidation heatmap provides insights into this behavior, showing significant buy-stop orders and liquidity above the $7.3 mark. This makes it a potential target for buyers, especially if there is a bullish revival in the coming days.
If the price reaches this crucial range, it would likely act as a resistance, resulting in a struggle between buyers and sellers. This scenario could lead to heightened volatility and increased market activity.
As Polkadot’s price consolidates near the critical $6.5 level, analysts are eyeing a potential bullish reversal in the short term. A breakout from this range will likely determine the price’s next move, and investors are watching the price action closely for any signs of a reversal.
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Source: CryptoPotato
