Polkadot finally broke through the $5 price resistance mark. Over the past 24 hour, DOT increased more than 6%. Over the past week, the coin has experienced double-digit gains.

Bitcoin moved into its daily chart’s $18,000 price zone, pushing altcoins on their respective charts. Despite a rally in DOT over the last 24 hours the altcoin is not yet out of the woods. The altcoin should not be sold below two price levels.

Although the technical outlook remained favorable for bulls, there was a decrease in the accumulation on daily charts. This indicates that there is a fall of demand. However, DOT secured a multimonth high in demand. Usually, after being valued too high, the coin begins to retrace its steps on its chart.

Indicators indicated that if buyers don’t remain consistent, DOT would see a decrease in its chart over subsequent trading sessions. The altcoin market cap fell slightly in the past 24 hours, which means that there was less demand for the altcoin. DOT is currently trading at 90% below its 2021 peak.

Polkadot Price Analysis: One-Day Chart

Source: TradingView.com.| Source: DOTUSD on TradingView

At the time this article was written, DOT was at $5.09 The coin was traded within an ascending parallel channel, (blue). The ascending channel (blue) marked a bullish market force.

At the time this article was written, Polkadot broke above ascending parallel channel. This indicates that DOT may consolidate over the following trading sessions before it begins to retrace.

The coin’s immediate resistance was $5.30. It could break that level and rally to $5.40. However, if Polkadot loses steam, it will plummet to $4.80. The altcoin must remain above $4.80 or the bears can take control.

Technical Analysis

Source: DOTUSD on TradingView| Source: DOTUSD on TradingView

Despite a slight decline in demand, the altcoin was still within the bullish zone. The Relative Strength Index, (RSI), was above 60. There was a slight downtick. This indicated that demand fell but the price was still under bullish supervision.

Similar to the above, the asset price was also seen above the 20 Simple Moving Average (SMA), which indicated the bulls were driving price momentum in the market. The altcoin crossed the 50-SMA (yellow), as RSI reached a multi-month peak.

Source: DOTUSD on TradingView| Source: DOTUSD on TradingView

With increasing demand, technical indicators indicated that traders could have a buying chance. The Moving Average Convergence Divergence signals price momentum and reversals.

The indicator displayed green signal bars linked to buy signals. In anticipation of a significant price movement in the next trading session, the Bollinger bands grew apart.

Featured Image from Unsplash, Charts from TradingView.com

Source link