Polkadot: Reversal Likely as Bearish Zone Nears?
• Polkadot attempted to edge higher from its recent low but could falter at an overhead bearish zone.
• The H4 market structure was bearish at the time of writing and buyers didn’t have an edge.
• A bearish order block exists on the 4-hour chart, slightly above the resistance level.
Polkadot Price Analysis
Polkadot [DOT] graced June lows following an extended bearish pressure on the third week of August (14 -20 August). Overall, 2023 DOT’s price performance has been dismal with January and February being the only positive months. The press time level ($4.5) of Polkadot was close to June and January lows.
The H4 chart’s Relative Strength Index (RSI) retreated from the oversold zone, indicating an ongoing reversal. However, the On Balance Volume (OBV) exhibited fluctuations which could delay a solid recovery as demand wavered. The drop eased to a familiar support of $4.32 that rescued bulls in June and buyers were not in control according to CVD (Cumulative Volume Delta). Open Interest also fell from $144 million to around $132 million between 17 – 18 August however it recovered slightly after that.
Bearish Zone Resistance
Apart from mid-June’s price action, DOT had to deal with a resistance level of $4.610 as well as a bearish order block of $4.63 – $4.73 (red) exists on the 4-hour chart, slightly above the resistance level creating a bearish zone that could set DOT into a reversal if breached by sellers.
If bears breach this overhead bearish zone then such a move could offer a shorting opportunity with entry at $4.63 and take-profit at the $4.32 support for traders looking for profits off this market condition .
At present buyers are not in control due to CVD readings while OI has shown some signs improvement after falling recently due to reduced demand in markets as well as presence of an overhead bearish zone that could trigger a reversal once broken by sellers offering traders opportunities for profits in this market condition through short setup with entry at $4.63 and take profit at support levels near$4..