The global cryptocurrency market hasn’t done too well so far in July. The month started with a bullish week but prices gradually started to fall as there was no sustained buying pressure. While some alts have been able to withstand mounting selling pressures, the same cannot be said for Polkadot.
The digital asset has lost 25% in value in the last 10 days alone, but the losses have been kept in check with a line of defense of $ 11.6. At the time of writing, DOT was ranked ninth in the crypto rankings with a market cap of $ 12.4 billion.
Polkadot 12 hour chart
There wasn’t much bullish insight from the DOT chart. While prices maintained a horizontal channel and traded mostly between $ 14-17 since late June, a collapse resulted in a steady 16% decline towards a support level of $ 11.7. In fact, its decline to the above levels represented a 6 month low for the digital asset.
On the plus side, the formation of a Doji candle indicated an imminent reversal, with the DOT moving higher in the past few days. The focus now shifted to the upper trendline of the DOT downward channel – a region that coincided with the $ 13 swing low on June 22nd. A successful close above this point would likely push the DOT back towards USD 13.8-14, which has now turned to resistance. Such a move would highlight a gain of another 9% over the state of publication.
The Relative Strength Index showed oversold market conditions that triggered a price reversal. A sustained rise towards the half-line would indicate mounting pressure to buy and a strengthening trend. The on-balance volume also saw a slight increase and was confirmed by the price movement of DOT. Moving above the upper trendline would increase the chances of a sustained rise in the coming days. Eventually, the MACD approached a bullish crossover as its histogram saw declining bearish momentum.
The bullish resurgence of DOT at USD 11.7 support fueled optimism in the market and supported a longer spike in the coming days. A rise above the $ 13 swing low from June 22nd would confirm a favorable result and once it does occur, traders can opt for long DOT to take advantage of the forecast increase.