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Mapping Polkadot’s price – Navigating key resistance zones, risk of price reversal
Polkadot [DOT] has been exhibiting bullish signs on the lower timeframe charts and is on the cusp of breaking past the $4.2-local resistance level. As Bitcoin [BTC] has breached above the $92k-level, this could potentially lead to a positive sentiment among altcoins. However, an analysis reveals that DOT’s bulls may be wise to take profits at key resistance zones rather than adding to their positions.
In a surprising turn of events, the swing structure in Polkadot retains its bearish undertone, despite the recent price action. This highlights the need for caution when making long-term bets on the cryptocurrency. According to our analysis, the $3.8-level was previously recognized as a crucial level that needed to be flipped to support in order to unlock further upside potential. Since then, DOT’s bulls have successfully achieved this goal.
However, traders must now be wary of key resistance levels such as $4.18 and $4.44. The price action has created a series of higher highs and higher lows over the past two weeks, indicative of a bullish structure on the lower timeframe charts. Furthermore, the DMI (Directional Movement Index) reveals a strong uptrend in progress, accompanied by an uptick in demand for Polkadot.
The liquidation heatmap has identified critical regions of support at $4-$4.18 and $4.3-$4.4 that could potentially drag the price up but also pose significant risks of a bearish reversal afterward. As such, investors are advised to book profits at these levels or look for alternative entry points for the next upward move.
In conclusion, the author’s view is that traders should be cautious and consider taking profits rather than adding to their positions in Polkadot.
Source: https://ambcrypto.com/mapping-polkadots-price-how-to-navigate-key-resistance-zones-risk-of-price-reversal
