Bitcoin’s dominance in the cryptocurrency market has had a significant impact on altcoin projects, including Polkadot. Polkadot recently experienced a rise from $6.4 to a resistance area at the upper threshold of the current price range.
Taking a closer look at the daily chart, Polkadot has been moving sideways between the support level of $6.4 and the critical resistance at $7.4. This has created uncertainty in the market regarding its future direction. Although Polkadot found support at $6.4 and saw an upward trend, it faced a minor rejection at the upper limit of $7.4, which coincided with the 200-day moving average.
This balance between buyers and sellers suggests that the market may continue to consolidate until a valid breakout occurs. In the short term, there is expected to be a slight downward trend targeting the critical $6.4 level.
Analyzing the 4-hour timeframe, Polkadot’s price has been confined within a range near the support level of $6 and the resistance level of $7.4, without a clear indication of its next move. After a period of increase, the price encountered the critical resistance zone defined by the 0.5 (7.4 dollars) and 0.618 (7.8 dollars) Fibonacci levels.
The current movement near this significant resistance suggests that sellers may dominate and there may be insufficient upward momentum, leading to another downward trend. Therefore, a price drop and a target of the lower boundary of the range are expected.
In order to predict Polkadot’s future expectations, it is important to analyze the sentiment in the futures market. The provided chart shows Polkadot’s daily timeframe price along with Open Interest and Funding Rates data. Both the Open Interest and funding rates have experienced significant drops, similar to a pattern observed at the beginning of 2024, which eventually led to increased demand and a strong upward trend.
Although both data points have declined, positions in the futures market seem poised for aggressive application, potentially leading to significant movement. If the current consolidation phase results in intense demand and the application of long positions, the market may enter a notable upward trend targeting higher price levels.
Disclaimer: This article does not provide investment advice. Investors should be aware of the high volatility and risk associated with cryptocurrencies and should conduct their own research.