Polkadot has seen notable growth this month and has similarly broken out of a descending channel that held price actions for seven months. It touched a 3-month high, dropped, and now looking for a solid rebound.
The much-anticipated correction seems to be in play following the latest significant drops in the entire crypto market.
Less than a month into the new year, the price of Polkadot increased by over 60% to tap a multi-month high at $6.84. It rejected that level and dropped slightly below last week’s support of $6 yesterday.
It recovered a little and now trades at around the mentioned support level. The previous daily candle represents a big loss that has ever occurred since the month’s opening. The picture may get bigger today as sellers add more to their positions, causing selling volumes to increase.
However, this will bring the past weeks of positive sentiments to a halt if the bearish scenario comes into play. The only condition for bullish continuation right now lies in a buyback and a breakout of the previous high.
Otherwise, a massive sell-off could occur in the coming hours as the monthly trading round-up today.
The market has shown a sustainable recovery throughout the month, and more can be expected as soon as the cryptocurrency finds a solid support level for a rebound.
Polkadot’s Key Levels To Watch Out For
After the price fell through the hourly support of $6.3 to a low of $6 during yesterday’s drawdown, DOT rejected that level and looked for a supply level to initiate another leg down.
The support levels to consider are $5.68 and $5 – retesting the channel’s resistance. Aside from these supports, the $4.6 and $4.23 levels are next to keep in mind.
If a buyback and a breakout occur above $6.66, the resistance to watch ahead is $7.4 and perhaps $8 in the future.
Key Resistance Levels: $6.66, $7.4, $8
Key Support Levels: $5.68, $5, $4.6
- Spot Price: $6.2
- Trend: Bullish
- Volatility: Moderate
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any projects.
Image Source: skorzewiak/123RF // Image Effects by Colorcinch
