Polkadot (DOT) price seems to have formed a local top at the moment, indicating that a pullback is highly likely. This pullback will be a necessary precondition for the bulls to recover and start a new uptrend. But if the sellers manage to seize control, the DOT price could enter a downtrend and trigger a steep correction.
Polkadot Price Needs a Rest
polkadot price From Jan. 31 to Feb. 8, it rose nearly 35% to $23.19. Unfortunately, this rally has pierced the weekly supply zone of $22.37 to $28.47, absorbing buying pressure and slowing progress.
As traders take profits, DOT is highly likely to bounce back to the immediate support level at $17.71 after a 17% drop. Therefore, investors considering investing in DOT can open a short position at $21.35 from the current level to take advantage of the bearish move to $17.71.
Market participants, on the other hand, can aim profits at the $17.71 support level, where buyers are most likely to accumulate discounted DOTs. Alternatively, traders can wait to enter a long position at $17.71 and create a profit barrier at $22.37 and weekly resistance at $24.18.
Either way, the incoming drop can create an excellent opportunity for both buyers and sellers.
On the other hand, if DOT price If it rises in advance and produces a daily candlestick above $24.18, the short investment idea described above will of course be invalidated. This development implies that DOT buyers are willing to push the altcoin higher.
Only a daily candlestick above $28.68 could signal the beginning of a medium-term bullish outlook. In this case, the price could spike towards the $31.33 resistance.
Disclaimer: What is written here is not investment advice. Cryptocurrency investments are high-risk investments. Every investment decision is under the individual’s own responsibility. Finally, Koinfinans and the author of this content cannot be held responsible for personal investment decisions.