DOT is at a major fork in the price chart — here’s how traders can navigate it

Disclaimer: The data offered doesn’t represent monetary, funding, buying and selling, or different forms of recommendation and is solely the author’s opinion.

• Polkadot bulls may anticipate a retracement or a breakout to enter lengthy positions
• The liquidation ranges plotted vital ranges the place a short-term reversal may happen

Polkadot [DOT] stamped its presence when it comes to improvement exercise by securing the second place when it comes to GitHub repositories. But, regardless of this exercise, the community noticed a 9.8% in income over the previous month.

Learn Polkadot’s [DOT] Value Prediction 2023-24

AMBCrypto reported that the value motion of Polkadot was flipping bullishly and anticipated a transfer towards $4. This transfer occurred as anticipated. Furthermore, DOT pushed properly previous the $4 psychological stage too.

The power of Bitcoin meant Polkadot merchants had many situations to arrange for

Supply: DOT/USDT on TradingView

The H4 chart confirmed a strongly bullish DOT construction. The Relative Power Index (RSI) additionally mirrored extraordinarily excessive upward momentum. The On-Stability Quantity (OBV) burst previous an area resistance and confirmed a big inflow of shopping for stress in latest days. The Chaikin Cash Circulation (CMF) signaled a lot the identical with a studying of +0.32.

Due to this fact, the symptoms prompt that merchants can count on extra positive aspects to come back. However the image was not but full. There was a spread formation (orange) that DOT traded inside since 2 October. Its excessive was at $4.29, and the mid-range mark was at $3.95.

Merchants may go quick with a good stop-loss close to the $4.25 stage however this was a dangerous commerce. A extra favorable entry may materialize within the coming days after a retracement towards the $4 stage.

Liquidation ranges hinted that over-leveraged lengthy positions may get hunted

Supply: Hyblock

The Cumulative Liq Ranges Delta was firmly inexperienced amidst the robust uptrend DOT exhibited in latest days. This additionally meant {that a} retracement southward would damage late longs. There was a $3 million quick liquidation at $4.22-$4.24, near the vary excessive.

Is your portfolio inexperienced? Examine the Polkadot Revenue Calculator

A lot of quick positions would additionally face liquidation upon a drop to $4.03-$4.05. A transfer to both stage would seemingly see simply over $3 million liquidated briefly positions. Due to this fact the $4 mark was a juicy goal for costs to hit earlier than one other transfer larger.

Therefore, merchants can anticipate a dip to the $3.95-$4.03 area to reassess whether or not a chance to go lengthy would come up. A drop under $3.95 would invalidate this concept.