Polkadot’s price was on a steady incline this month, having had to endure a tough stretch of sideways moves in the latter half of January 2021. However, with the crypto price closer to its next level of resistance, the question on many traders’ minds would be whether further price discovery is on the horizon or whether a pullback is more likely to occur.
At the time of writing, DOT was trading at $31.6, with the crypt having a registered market cap of more than $27 billion. Over the last 7 days, DOT’s value has been calculated to be close to 23 percent. However, thanks to a small fall in price over the last 24 hours, bears on the market may slowly regain control of the label.
Polkadot 1-day chart
Source: DOT/USD, TradingView
The longer time frame charts for Polkadot demonstrated the simple uptrend of the coin. However, there has been a small dip in the bullish momentum in the last 24 hours. Although there seems to have been little reason for concern, if DOT fails to break the resistance level at the $34.7-price point, a small correction can soon become a reality for the cryptocurrency.
In such a scenario, Polkadot is likely to see the price trace back to its first support of the $22-price range. If this unfolds, traders will gain from a short position, and given the collapse in the Northbound momentum, this is likely to be a fact for DOT in the near future.
Rationale
As per the technical indicators of the coin, there could be a reversal of the trend in the works. The RSI indicator seemed to be moving out of the over-purchased zone, suggesting a decrease in the number of buyers on the DOT market.
Interestingly, after a bullish crossover, the MACD indicator did not display signs of an imminent reversal. However, the Signal line started to grow on the charts and continued to transfer to the MACD line.
Important levels to watch out for
Resistance: $34.7
Support: $22, $14
Entry: $29.2
Take Profit: $22.3
Stop Loss: $34.2
Risk/Reward: 0.83
Conclusion
DOT’s price has been on a steady incline lately, but at the time of publishing, there was a minor dip in the hurricane. In the coming weeks, if the coin continues to fail to crack the resistance mark, further price discovery for DOT will be temporarily halted and a small price correction can be expected.
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