Polkadot bulls fight to push past $5, traders can wait for a reaction at this level

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

  • The rapid rise in DOT prices over the past week has emboldened the bulls.
  • The bears can expect a rejection around the $5.11 level.

Bitcoin topped the $17k mark and most coins in the crypto market also saw relief rallies. Many assets saw their higher term market structure defeated and shifted to a bullish bias.

Read Polkadot Price Prediction 2023-24

Moles was one of these assets. He has posted significant gains despite the fearful sentiment of the past few weeks. The inefficiency on the charts has filled in, and a rejection at the key Fibonacci retracement level could see a reversal.

Polkadot Hits Psychologically Significant $5 Mark

Source: DOT/USDT on TradingView

The $5 mark is an important round number that the bulls will be eager to beat. Also, it had confluence with the 78.6% Fibonacci retracement level. This was based on the move down from $5.35 to $4.22 in December.

Last month’s sharp decline saw a fair value gap appear on the daily and 12-hour chart which extended from $4.7 to $4.99. This inefficiency has been filled at the time of writing this article. However, the market structure was bullish, having changed a few days earlier. Taken together, it could be the case that the price has spiked higher to collect liquidity just as BTC is at a resistance zone of $17.3k.

Are your shares flashing green? check the DOT Earnings Calculator

To the north, a pool of liquidity ranged from $5 to $5.15. This region may see less selling pressure on the time frame. On the daily chart, the RSI showed strong bullish momentum with a reading of 61 and the OBV also posted gains.

However, a move above $5.11-$5.15 and a retest of this zone would offer bulls a higher chance of another move towards $5.35. This was because the $5 and $5.11 levels can act as persistent resistance levels.

Traders can wait for a decisive move above $5.11 before buying. Alternatively, they can wait for a move to the $5.11-$5.15 region and look for a drop below $5 before entering short positions. As it is, the market had yet to show its hand.

Spot CVD and Open Interest are experiencing a resurgence in recent days, but is it enough?

Polkadot bulls struggle to break above $5, traders can expect a reaction at this level

Font: coinalize

Over the last five days, open interest has been slowly gaining ground to show the flow of capital into the market. Meanwhile, the price has been in a strong uptrend. Therefore, the inference was bullish momentum. Spot CVD was also up by a small margin to show the buying pressure behind the currency.

A further rise in prices coupled with rising OI will signal strong bullish sentiment, and buyers may look for buying opportunities on a lower time frame. Meanwhile, a rejection at the $5.11 level and a session close below $5 thereafter could interest the bears.

Leave a Comment