Journalist
Posted:
- Polkadot prices reached $8.58 on December 22 before falling.
- This was a new high for 2023 and the market structure supported the idea of a new rally.
Dot [DOT] is up 47% in December and is up 20% in the last two days based on prices at the time of writing. The blockchain also saw a big increase in revenue, indicating increased usage.
The recent rally past $7.9 meant that DOT has recorded a new high for 2023. The technical structure showed that further gains were likely, after a small step back in the coming days.
The bearish order block was about to be broken
Source: DOT/USDT on TradingView
At the time of writing, DOT had closed a one-day trading session above $7.9. A retest of the $7.2-$7.9 region can be expected in the coming days. After that, the token is likely to continue its rally and aim for new highs.
The $7.2-$7.9 area represented a bearish order block on the one-day chart. The above chart was a three-day chart, which highlighted the strong bullish structure of DOT on the higher time frame chart.
Moreover, it also underlined the next major resistance at $9.65. This level was a high level as of August 2022.
It is unclear whether such a rally would take place this month or in January 2024. The OBV has moved higher without a break and the RSI stood at 75, highlighting intense bullish momentum.
What does the lower timeframe data indicate?
Source: Hyblok
Prices inevitably gravitate towards liquidity. Therefore, AMBCrypto analyzed liquidation levels to understand where DOT could go next.
The Cumulative Liq Levels Delta was still deep in positive territory even after the $8.5 decline that started in the last 12 hours.
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There were large liquidity pockets in both the north and the south. Given the positive Delta, bulls are more highly leveraged, making level hunting more likely.
From the data above, AMBCrypto noted that there were significant liquidation levels up to $6.93. Notable were the levels of $7.81, $7.5 and $7.3, where a reversal could also occur.
Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.