A Breakout Above This Level Could Help Polkadot Recover On Chart

Polkadot has witnessed continued downfall in price since the last month. It has now established its support level at $6.30, however, the coin has been trading very close to that support level. After it broke below the $6.66 support line, the coin has spiralled downwards.

It retested the $6.30 level the past month. Technical outlook for the coin displayed build up of bullish pressure. The price of the altcoin has remained sandwiched between the $6.58 and $6.30 levels over the last trading sessions respectively. DOT has continued to face rejections at the $7 level and that had exhausted the bulls on the chart.

Broader market weakness is also to be blamed for DOT’s mundane price action. DOT briefly traded below the support line of $6.30  in July which had led to a sell-off on the chart. Indicators display recovery of buying strength. If buyers regain the momentum then there is a chance for DOT to climb above its immediate resistance mark.

Polkadot Price Analysis: Four Hour Chart
Polkadot was priced at $6.53 on the four hour chart | Source: DOTUSD on TradingView

DOT was trading at $6.53 at the time of writing. If the coin manages to trade at this price level for a significant period of time then it might topple over the $6.66 resistance mark. Once it moves above the $6.66 mark, Polkadot can attempt to revisit the $7 price ceiling.

If Polkadot trades above $6.80 then it could invalidate the bearish thesis for the coin. On the flipside, being stuck at the present price level for too long could drag DOT down to $5.90. Trading volume of Polkadot declined which indicated that buying strength remained less in the market.

Technical Analysis
Polkadot displayed recovery of buying strength on the four hour chart | Source: DOTUSD on TradingView

DOT pictured recovery of buying strength on the chart as coin moved upwards. Buying strength displayed an uptick on the four hour chart. In accordance with the same, Relative Strength Index swiftly climbed above the zero-line. A reading above the zero-line indicated that buying pressure took over the market.

It is too early to say if the bearish action is fading out, DOT’s price action could also be a brief relief rally. Price of DOT also rose above the 20-SMA as demand for the coin shot up. This signalled that buyers were responsible in driving the price momentum in the market.

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Polkadot flashed buy signal on the four hour chart | Source: DOTUSD on TradingView

The altcoin captured the rise in price and reflected it in the technical indicator. Awesome Oscillator determines the price movement and registers reversal in the same. AO pictured green histograms as price direction showed reversal on the chart.

These green histograms on the AO were buy signal for the coin. Bollinger Bands points towards price volatility and fluctuations. The narrowing of the bands indicated that price of DOT will trade around the same levels over the upcoming trading sessions.

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Featured image from The Market Periodical, chart from TradingView.com