By AMB Crypto - 6 months ago - Reading Time: 2 minutes
Polkadot’s price falls past $7 – How does this affect DOT’s prediction?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
Market structure remained bullish due to the overwhelming strength of buyers in the last five days A retest of the $6.3-level will be likely should DOT close a session below $6.8Polkadot [DOT] has leaned strongly north in December so far. Despite the pullback from $7.68 over the weekend, the altcoin retained its bullish market structure. Bitcoin’s [BTC] latest dip saw DOT recede considerably too.
It is possible that a short-term resistance level just above $7 could rebuff bulls should DOT bounce in the coming hours or days. What should traders watch out for next?
Short-term move, subsequent retracement offered some clarity on the way forward
Source: DOT/USD, TradingView
From 7 December to 9 December, DOT saw a swift move north from $5.9 to $7.69. Soon after, the bulls were beaten back and prices momentarily dipped to $6.285 a few hours before press time.
The explosive rally past $7 was used to plot a set of Fibonacci retracement levels (cyan). The 78.6% retracement level was at $6.284, where Polkadot prices withdrew. Therefore, two scenarios are possible. The bullish one is where DOT surges higher without dropping below $6.8.
The slightly bearish scenario, at least in the short term, would be a slow drop towards $6.285 once more. Following such a dip, the uptrend could resume. In either case, to the north, the next bullish target is at $7.9 – A higher timeframe resistance level. The $8.21 and $8.8-levels could obstruct the buyers as well.
Liquidation data showed a bounce past $7 is likely
Source: Hyblock
AMBCrypto analyzed the liquidation level data from Hyblock. The last couple of days saw the Cumulative Liq Levels Delta drop steadily. The latest fall to $6.3 saw it go red, suggesting that a move upward could contribute to pain in the Futures market.
Read Polkadot’s [DOT] Price Prediction 2023-24
Low leverage short positions were opened on 11 December with $7.12 as the estimated liquidation level. Combined with the negative Delta, a bounce in prices to collect liquidity before a reversal is possible.
Original source: AMB Crypto