The past week saw Polkadot (DOT) recover significantly from the £5.6 zone. Indicators showed that there was strong buying pressure supporting this rally.
Earlier this week, DOT’s weighted sentiment decreased, according to a recent finding. However, the price has managed to continue its upward course on the charts.
A bearish order block was discovered around the £5.80 area of the 4-hour chart. It denoted a short-term resistance belt. The lower timeframe market structure has remained bullish over the last few days.
The structure changed from bearish to bullish on the daily timeframe as well. This underscored the possibility of buying opportunities for risk-averse traders attempting to trade the trend.
A rising wedge pattern emerged over the past three days. The resistance zone’s confluence suggests that the altcoin could experience a short-term pullback. The 4-hour RSI’s bearish divergence with the price was also seen. This increased the chance of a dip. The OBV stayed flat, indicating no heightened selling recently.
DOT could visit the £5.36-£5.41 support zone as a result of this pullback. In addition to serving as a strong belt of support throughout the past two weeks, this area was also close to the wedge pattern’s base.
The Open Interest increased by a relatively small amount during the last two days. It was close to £1.74 million, but this growth coincided with DOT’s increase of around 7%.
The Long/Short ratio was also not in favour of the bulls. In the last 24 hours, short positions achieved a small success. At the time of writing, the ratio was 50.19% shorts. On Binance, the funding rate for DOT was favourable. This indicates that speculators’ bullish outlook for the asset is intact.
Going back to the £5.36-£5.42 range will probably present a solid buying opportunity. The bearish hypothesis supported by the confluence of the rising wedge pattern and the bearish order block will be rendered invalid by a move over £5.89.