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Polkadot’s $10 roadmap: Traders watch out for THESE levels
The recent price surge and subsequent correction of Polkadot (DOT) have presented trading opportunities to market participants. Following a significant breakout, the asset has peaked and corrected, with support identified at $6.861.
Notably, the Relative Strength Index (RSI) hovered around 50, indicating a balance between buying and selling forces. This data provides crucial insights for traders seeking to navigate the market effectively.
A closer look at Polkadot’s chart reveals key resistance levels at $8.181, $9.573, and $10.490. According to the data provided by TradingView, these levels will be crucial in determining the asset’s future trajectory.
Moreover, assessing Polkadot’s momentum using the RSI indicates that the RSI approached overbought territory during the uptrend, signaling strong bullish momentum. As the price peaked and corrected, the RSI declined towards neutral levels, reflecting the easing of buying pressure.
Currently, the RSI hovers around 50, suggesting a balance between buying and selling forces. A move above 70 could signal renewed bullish momentum, potentially leading to a retest of resistance levels. Conversely, a drop below 30 might indicate increased selling pressure and a possible decline towards support levels.
Furthermore, Polkadot’s MVRV Ratio provides valuable insights into the asset’s valuation. An MVRV Ratio above one indicates that the market value exceeds the realized value, suggesting potential overvaluation, while a ratio below one implies undervaluation.
The MVRV ratio for Polkadot rose above 1 during the recent uptrend, indicating that the market value was higher than the realized value, which is typical in bullish phases. As the price corrected, the MVRV ratio declined towards 1, reflecting a move towards a more neutral valuation. Currently, the MVRV ratio is slightly above 1, suggesting that Polkadot is modestly overvalued.
Should the ratio increase significantly, it may indicate heightened bullish sentiment and potential price appreciation. Conversely, a decline below 1 could signal bearish trends and further price corrections.
Source: ambcrypto.com
