DOT/USD is likely to trend upwards to $5.00, but a negation of the sentiment could see bears push to lows of $3.80
Polkadot is trading near $4.40 on the day, just over one per cent as the bulls battle to hold a crucial support area. While the short term outlook suggests that the price could yet dip on increased profit-taking, a positive turn will likely see the bulls test the area around $5.00.
Polkadot is struggling to keep prices above the 10-day EMA ($4.39) as the bulls look to prevent another dip that could send prices towards $4.20.
Since hitting an August peak around $6.68, Polkadot’s price has largely been in a downtrend. On the 6th of November, the token traded at highs of $4.74 but has struggled to retain an upside momentum. The technical picture for DOT/USD on the daily chart suggests that the bulls face strong overhead resistance near $4.58.
The relative strength index (RSI) is beginning to slope near the midline to suggest fresh profit booking deals that could push DOT/USD lower. To prevent further losses, the bulls must defend gains at the 50-day simple moving average ($4.20). Beyond the 50-SMA support level, the next point of refuge is near monthly lows around $3.80.
The 4-hour chart shows that the price of DOT is below the 10-EMA and the 50-SMA. At the same time, the RSI is pointing to a negative turn as it remains lodged below the midpoint. The EMA curve is turning negative and if the RSI keeps the bearish divergence formation, the sellers could take full control and do more damage.
The scenario is what bears need to power their push for a retest of the 7th of November lows near $4.07. Successful execution of the plan could see DOT/USD retrace to its monthly lows as noted above.
However, the bulls will invalidate the negative view if they push higher for a breakout above the highlighted EMA and SMA. A positive flip at the above price levels will clear the path to $4.64 and then $4.88 levels. The short term objective will then turn to the psychological level of $5.00.
Major altcoins looking to bounce
As well as Polkadot, other altcoins in the top ten are looking to bounce off critical support areas as the Bitcoin technical outlook suggests a consolidation phase on either side of $16,000. Ethereum is looking to strengthen above $450, while XRP and the forked Bitcoin Cash aim at keeping bears off near $0.27 and $244, respectively.
Cardano (ADA) is perched near $0.101; ChainLink (LINK) looks set to break above $12.25 and Tezos (XTZ) is changing hands around $2.03. At the time of writing, Litecoin (LTC) is the best performing coin among the top 10 digital assets. The altcoin has surged 6% in the past 24 hours to trade near $66.20.