- Polkadot’s price has been on a downward trend since March, but signs of recovery are emerging.
- Technical analysis shows the cryptocurrency testing the moving average, with potential for a rebound to $9.
- Sentiment analysis indicates the market may be forming a bottom, setting the stage for a possible price increase.
Polkadot’s price has been on a downward trend, but recent technical and sentiment analysis suggest a potential recovery. This article delves into the details, providing insights into Polkadot’s future prospects.
Technical Analysis of Polkadot’s Price
Polkadot’s price has been making lower highs and lows since being rejected from the $12 resistance level. The $9 mark has also been broken to the downside. The price is currently trading below the 200-day moving average, which is around $7.2. However, it is testing the moving average at the moment, following a rebound from the $6 support zone. If the market successfully climbs back above the 200-day MA, a recovery toward $9 would be expected in the coming weeks.
Zooming in: The 4-Hour Chart
On the 4-hour chart, Polkadot is currently consolidating inside an ascending channel above the $6 support level. The midline of the channel has been broken to the upside, and the price is likely to continue toward the higher boundary of the pattern in the short term. However, investors should be cautious as the RSI is approaching the overbought area, which could signal a bearish reversal. In this case, the market would likely break the channel to the downside and drop even lower.
Sentiment Analysis: Polkadot OI-Weighted Funding Rates
During the recent Polkadot price decline, many long positions were liquidated. The OI-Weighted Funding Rates metric has dropped significantly, indicating that the futures market on the buy-side is no longer overheated. Considering these funding rates, and the price consolidation, the market is likely to be forming a bottom. Therefore, if sufficient supply comes in from the spot market, Polkadot could see a rise in value once again.
Conclusion
While Polkadot’s price has been on a downward trend, recent technical and sentiment analysis suggest a potential recovery. The market is testing the moving average and the OI-Weighted Funding Rates indicate a possible bottom formation. Investors should keep a close eye on these developments as they could signal a turnaround for Polkadot’s price.
