The improved sentiment in the broad market saw Polkadot’s bulls dominating the short-term trends. The past month remained hopeful as the altcoin secured a spot around the Bollinger Bands’ upper band.
Breaching $9.11 positioned the alt on a lucrative side as far as market momentum is concerned. Nevertheless, enthusiasts should check the caveats revealed below before executing positions. While publishing this post, DOT traded at $9.34, surging 8.7% within the past 24 hours.
Polkadot Daily Timeframe
The revival from the asset’s multi-yearly lows on July 13 triggered short-term buying momentum. The strength helped Polkadot flip a 4-month trend-line resistance to support. Also, the alternative token printed a climbing wedge pattern to reflect surging buying pressure.
Furthermore, the Bollinger Bands displayed a volatile break, with the lower and upper bands keeping distance. The current candle reversing from the rising wedge’s upper trend-line might mean a near-term decline for DOT. Such a development would reveal potential targets around the $8.2 mark, beyond the BB’s basis line.
Investors should watch for reversals from the nearest resistance territory to identify the probability of this short-term decline. On the other side, extended bull runs might be short-lived due to the resistance at $9.8.
Reasoning
Consistent bull pressure saw the RSI (Relative Strength Index) breaching 63. Traders might consider a closing beneath this region a possible near-term downside trigger. Nevertheless, the CMF (Chaikin Money Flow) recorded lower highs as the price action printed higher highs.
Thus, any bounce back from the immediate resistance might confirm a bearish divergence. Also, the VO (Volume Oscillator) supported the CMF, affirming bearish divergence possibilities.
Final Thought
Considering the readings on the Bollinger Bands plus the climbing wedge pattern, DOT might experience a short-term setback before embarking on upsides. Targets would stay as mentioned above. Nevertheless, analysts should evaluate the broad market to complement technical indications for profitable bets.
The cryptocurrency space remains in the green today, following overnight upsurges that had Bitcoin exploding past $24K. Meanwhile, the bellwether crypto saw a slight retrace to trade at $23,850 during this publication. Will that trigger retracements in DOT? Time will tell.
Stay tuned.