Polkadot on the Verge of Breaking Out of $40 Range
The one week has been highly inclined towards the upside momentum of Polkadot cryptocurrency. Not only has the cryptocurrency shown signs of breaking out of its consolidation levels, but it has climbed to the 8th spot in terms of market capitalization. Polkadot (DOT) currently values $35.5 billion with its 978 million coin supply.
Utilizing the power of sharding, Polkadot has emerged as one of the leading cryptocurrency networks to improve the interoperability of cryptocurrencies. It supports all sorts of digital assets, tokens, and cryptocurrencies and will make it easier for institutions to create new applications, institutions, and services.
Owning DOT has significant advantages, such as it allows one to participate in networking and governance while creating para chains. This parallel processing power alleviates better scalability and makes it easier to upgrade the network without using the older generation method of forks.
Polkadot Price Analysis
For the last six weeks, Polkadot price has been stuck between a narrow consolidation zone with its upper limit of $36 and lower limit of $27.5. The lower limit is also being supported by buying because of the 200 days moving average curve.
On daily charts, DOT has shown some buying near the $36 mark, but each buying is being pushed back to lower levels because of sudden selling near the $36 mark. This price action indicates decreasing buying sentiment near the level that has enforced profit booking for the past two times. In addition, DOT being stuck here for the last three days has added to the fear of another profit booking.
Taking cues from the 200 DMA curve of $27.20 and a strong support level of $25.20, we can expect any fallback from current levels to be limited to the $25. Buying at this point, however, carries a much higher return potential as DOT is near to its previous swing high, and breaking this level can ignite a renewed buying sentiment.
Moreover, we have witnessed consistent buying from lower levels in the past two weeks without any clear profit booking sentiment. There have been wicks on both sides, but it indicates that buyers have not lost hopes of claiming a higher level beyond the $40 mark. Volumes in the last two weeks have fared almost the same with no sudden spikes.
Polkadot offers a more decisive price action on four-hour charts, as we can witness it taking support from $26.60 levels and breaking the previous swing of September 23, 2021. Since October 07, 2021, DOT has turned the upper swing level into near-term support and is slowly consolidating and attempting to breach $37.50 levels on this time frame.
Breaking the $37.5 levels will be instrumental in taking Polkadot to new levels as per DOT coin price prediction. With this price action, $33.50 has emerged as a strong support level for the short term. Retesting of $37.5 level will continue till sellers succumb in front of buyers.