The past 60 hours have been bullish for Bitcoin. The region of $ 34,000 to $ 34.5,000 served as support and saw BTC rise to hit $ 40,000. However, he couldn’t stay there as the selling pressure forced him to drop in the charts again. In fact, the world’s largest cryptocurrency was trading at $ 37,529 at the time of writing.
Recent moves in Bitcoin have also affected Polkadot prices. DOT saw the beginnings of a bearish divergence and alongside BTC. It slipped almost 8% in 24 hours. At the time of going to press, it looked like it might be heading further south again.
12 hour DOT chart
Source: DOT / USDT on TradingView
A divergence between price and momentum indicators like RSI does not require immediate withdrawal. However, it is definitely one to watch to indicate weakening momentum. The DOT posted a bearish divergence as it peaked at $ 14.95.
It has faced some selling pressure alongside Bitcoin and Ethereum. But due to the recent strong gains for DOT, it may be forced to undergo a deeper correction in the coming days. It would be a good pullback and can be seen as a buying opportunity.
Reasoning
Using the Fibonacci retracement tool for two moves, one from $ 4.58 (white) and the other from the recent drop to $ 7.16 (yellow), some retracement levels can be highlighted. .
The confluence between these levels and horizontal support levels indicates areas where DOT can find solid support in the weeks to come. Above $ 10.5, DOT doesn’t have much history in terms of price action. Therefore, the confluence of the retracement level, along with a shorter period analysis, yields support levels for a possible retracement.
The regions of $ 11.3 to $ 11.5 and $ 10.35 to $ 10.5 are the strongest and closest areas of support over the longer periods. The $ 12.5 regions may also stop the selling pressure.
Short scalp trades at $ 12.5 can be opened. But trading against the trend is inherently riskier. Therefore, it is recommended to buy at these levels.
Conclusion
Polkadot appeared to be benefiting from a bullish outlook over the longer period. However, one can observe a slight decline can be observed for DOT. This would present a buying opportunity. Polkadot climbed to fifth place on CoinMarketCap by market cap. It briefly exceeds XRP. In the coming weeks, Polkadot could perhaps claim XRP’s place on the list.
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