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Since placing its all-time excessive on 4 November, Polkadot (DOT) sellers refused to surrender their edge till the bulls halted the downslide on the $16.8-mark. The newest restoration pushed the alt above its four-month-long trendline resistance (now help).
Going ahead, DOT may see a near-term setback in the direction of the $21-$22 vary as the value hovered close to its ten-week resistance. An in depth under its excessive liquidity vary (Level of Management/POC) may heighten the prospects of a take a look at of its long-term trendline help earlier than the bulls attempt to push for a bonus. At press time, DOT traded at $22.85.
DOT 4-hour Chart
Supply: TradingView, DOT/USDT
The bearish part (from its ATH) led the alt to lose greater than 74.5% of its worth and plunge towards its seven-month low on 24 February.
The current bullish rally marked bullish trendline help (white, dashed) whereas the alt crossed the 20/50/200EMA. The alt snapped its four-month trendline resistance and flipped it to help. This rally has seemingly discovered a hindrance close to its POC the place the conflict between the consumers and sellers has spiked in the previous couple of days.
The present value was nonetheless not overstretched from its 20-50 EMA. Thus, rising the probabilities of excessive volatility within the days to return. From right here on, any shut under the POC may trigger a take a look at of the decrease trendline of the rising wedge (white). Following this, the bulls may collect sufficient power to check the $23-zone earlier than a pattern commital transfer.
Rationale
Supply: TradingView, DOT/USDT
The RSI has steadily marked decrease peaks within the final eight days because the bears stored exhibiting elevated strain. This trajectory was opposite to the value motion throughout this timeframe. Thus, revealing a bearish divergence on the 4-hour chart.
Moreover, the CMF conformed to the RSI and paved the same path whereas affirming a bearish divergence with value. Thus, the near-term restoration can halt on the trendline resistance.
Conclusion
Contemplating the potential of the divergences on the RSI and CMF, any recoveries can discover hindrance on the $23-zone. An in depth under the POC would place DOT for a short-term setback in the direction of the $21-$22 vary earlier than the bulls can reclaim their edge.
Moreover, an total market sentiment evaluation turns into important to enhance the technical components to make a worthwhile transfer.
