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- Polkadot has an inefficiency in price schemes that ranged from $4.7 to $5
- The bulls want to push the price beyond the $5 region, and a retest could be a buying opportunity
Polkadot climbed clearing the $4.35 resistance and broke the lower time frame of the bearish market structure a few days ago. The asset hasn’t looked back since then, and has continued to gain nearly 7% since then.
Read Polkadot’s 2023-24 price forecast
Can the bulls continue to assert their will in the market, or did the bulls bid before they rebounded from the blow? At press time, the latter seemed likely. Either way, the $5 mark will be crucial.
The polka dot breaks the previous major resistance levels
The polka dot rose clearing the $4.55 resistance. On the 4 hours chart, its structure turned bullish in late December when DOT surged above $4.35. The strong rise in the last few hours of trading consolidated the bullish momentum. Trading volume has also been high in recent hours.
The Relative Strength Index (RSI) has entered the overbought territory above 70 indicating strong bullish momentum. However, the RSI has not yet indicated divergence or weakening of the bullish momentum. The DMI indicator also showed a strong bullish trend. +DI (green) was above 20, as was the ADX (average directional indicator) line, which has been showing a significant uptrend in recent days.
Bollinger Bands (BB) has also been expanding significantly recently, which indicates high volatility. The price is stuck at the upper band of the indicator. It seems likely that the price will retest $4.66 as support and continue higher.
How many points can you get for 1 dollar?
Higher time frame charts such as the daily chart noted $4.7 as a major resistance level, with $5 as the next north level of interest. There was also a fair value gap around $5 as the DOT quickly crashed through this territory during the December 16 sell-off. Could the Department of Transportation (DOT) fill this inefficiency before moving down again?
The open rate decreased, while the borrow rate remained somewhat positive
Data from Coinglass showed that Bitmex and Binance had slightly positive funding rates on the DOT/USDT (or USD) pairs. This means that the traders were optimistic. OI has fallen in the past few hours, even as the price has risen. This most likely indicates that long positions are closed. The local CVD rate also increased in the past two days.
Risk averse traders can wait for a move above $5 and retest before buying Polkadot. More aggressive traders can wait for a breakout of the lower time frame of the bullish structure to look for short selling opportunities.