Opportunity to buy Polkadot as bullish outlook continues

Polkadot price has broken the $5 resistance mark in the past trading sessions. Over the past 24 hours, DOT has gained 3.8%. The price of Bitcoin is rising, causing other altcoins to move upwards on their respective charts.

When Bitcoin crossed the $18,000 price mark, other altcoins broke their immediate resistance marks. Polkadot price momentum remains high in short time frame. DOT’s technical outlook shows that despite price declines, accumulation on the chart increased.

Polkadot demand also showed an increase on its chart. The asset price needs to stay above the $5.40 support line and break the $6.20 resistance level if the coin is to maintain its bullish stance for the long term.

The DOT’s daily chart also points to an impending decline in price, which means traders may be presented with short opportunities. Currently, DOT is trading at an 89% discount from its all-time high secured in 2021.

Polkadot Price Analysis: One Day Chart

Polka dot
Polkadot was priced at $5.89 on the one-day chart. Source: DOTUSD on TradingView

At the time of writing the DOT was exchanging hands at $5.89. The polkadot had formed a cup and handle pattern, which means the bullish momentum could continue, which is why the polkadot resumed its northward journey on the daily chart.

The overhead resistance for the coin was $6. Breaking the $6 mark could send the coin to $6.20. Since the Polkadot was overbought, the demand for the coin may decrease.

This may cause the price to fall for a few trading sessions before rising again. If the price pulls back, the DOT will find its local support at $5.40 and then $5.33.

Both of these levels can be an entry point for buyers, as the altcoin will increase in value once these support lines are touched. Polkadot volumes traded in the previous session were still in the green, indicating that buying pressure remains.

Technical analysis

Polka dot
Polkadot shows surge in demand on one-day chart Source: DOTUSD on TradingView

The asset registered a multi-month high in demand last week. The coin was devalued a week ago, and as a result, demand has dropped slightly. The relative strength index retreated past the 80 mark, signaling the asset was overbought.

At press time, the DOT again posted an increase, indicating that purchasing power is rebuilding. On that note, the price of DOT was above the 20-Simple Moving Average line, indicating that buyers are driving price momentum in the market.

The coin was also above the 50-SMA (yellow) line. Nevertheless, the 50-SMA line crossed above the 20-SMA line, symbolizing a death cross. A death cross means an impending fall in price. This reading is relevant to traders looking for an opportunity to short the asset.

Polka dot
Polkadot showed bearish buy signals on the one-day chart Source: DOTUSD on TradingView

Moving Average Convergence Divergence (MACD), which shows price momentum and reversals, shows bearish buy signals. This means that the price will fall in the next trading session.

The parabolic SAR also supports the MACD as the dotted lines formed above the price candlestick, indicating that the asset’s price direction is turning negative. Overall, bulls can dominate the price action in the short time frame.

Featured image from UnSplash, charts from TradingView.com

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