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- The daily structure was bullish, but the lower time frames confirmed a bearish trend.
- This meant that a deeper reversal below $6.5 was possible.
Since early January, Polkadot has been bullish on price charts. This has been a trend seen in the altcoin market, so DOT was no exception. Like the rest of the market, Polkadot has also come under strong downward pressure in recent days.
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The strong rally from $6 earlier this month saw most of the gains reversed last week. The psychological cycle number at $6 coincided with a bullish order block on the daily time frame, highlighted in blue.
It was likely that Polkadot would fall below $6.5 in the coming days and possibly as low as $6.
H4 FVG failed to start a rally and the bears were dominant
Source: DOT/USDT on TradingView
The daily chart showed that although the bearish pressure was significant last week, the bulls can look to make bids in the $6 area. The mid-February rally from $6 was strong and easily surpassed $7 to reach $7.9 on February 19.
Since then, prices have retreated and are trading at $6.57 at press time. That amounted to losses of 16.6% over the course of a week. Analysis of the lower time frame charts such as the 4-hour showed that the bears were firmly in the driving position.
The price had left an H4 imbalance in the $6.9-7.15 zone. Although there was a bounce from $6.9 on February 22, it was not enough to break above $7.36. Now, DOT is atop another support at $6.48, with $6.3 and $6 as further support levels to the south.
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The Awesome Oscillator was above the zero line, but it made red lines on the histogram to show that the bulls weakened last week. The CMF was at +0.08, which indicated significant capital flow into the market.
The bias on the daily time frame has been weakly bullish and a break into the $6 area could provide a buying opportunity. Until then, lower time frame traders can look for asset reduction.
Sentiment was negative behind Polkadot
Source: Santiment
Binance’s funding rate fell into negative territory in recent hours to show that short sellers had the upper hand. Weighted sentiment was also negative, according to Santiment data. Social dominance was at best 0.6% in February and stood at 0.32% at press time.
Overall, the indication was that market participants were biased towards the asset.