Polkadot has been on a tear, surging towards a crucial resistance region marked by the multi-month wedge’s upper boundary and the $6.4 threshold. This area is likely filled with significant supply, potentially halting the upward momentum in the short term and leading to a temporary phase of sideways consolidation.
According to technical analysis, the daily chart shows a significant price surge from the $5.5 crucial support, driven by aggressive long positions in the perpetual markets. This increase has propelled the price towards a substantial resistance region, where a successful breakout could lead to a notable shift in market sentiment.
The 4-hour chart provides additional insights into Polkadot’s price action, showing a strong uptrend forming higher highs and higher lows, indicating a bullish sentiment in this timeframe. However, the price has now reached a critical range, bounded by the resistance of its prior major swing high at $6.42 and the dynamic ascending trendline.
A breakout from this range is imminent and will clarify the direction of the next major trend. If the price faces a bearish rejection and breaches the uptrend, a consolidation phase within the $6.4-$5.5 price range is likely to follow.
Sentiment analysis suggests that Polkadot has recently seen an uptick in demand, leading to a significant rise towards its previous major swing high of $6.4. However, for the price to embark on a robust and sustained bullish trend, a significant increase in both Open Interest (OI) and funding rates is necessary.
The current bullish momentum is not yet sufficient, and the market requires more buying activity in the futures market to maintain and strengthen the uptrend. As Polkadot approaches the crucial resistance region, investors will be watching closely to see if it will break through and continue its upward momentum, or if it will face a temporary setback and consolidate before making its next move.
BitminerFactory is brought to life by Darrell Houghton, our astute publisher. With a deep-rooted passion for crypto and crypto mining spanning many years, Darrell’s unwavering enthusiasm fuels his daily quest for knowledge. He is eager to share the pivotal news stories of the day while also providing his own analysis and commentary with Bitminer Factory’s readers.
Source: CryptoPotato
