- Polkadot’s ability to stay above the $5.30 zone could open the door for a move back to $8.
- More traders betting on long, suggesting investors were still believing in more upward potential.
Polkadot [DOT] rose almost 10% alongside a more than 19% surge in daily trading volume as per CoinMarketCap. At press time, DOT traded at $5.07, aiming to reclaim the critical $5.30 level.
Naturally, a sustained close above $5.30 could open the door to the $8.00 resistance. A successful flip of that zone may even clear the path to $11.67.
But, a rejection around $5.30 could offset a course correction back to $4.70 or even retest the $4.30-$4.00 accumulation range.
The MACD changed to reflect bullish momentum. This was after the MACD line crossed over the signal line, with the elevated histogram bars indicating the growing upside stress.
Source: TradingView
The $5.30 showdown begins
The breakout on the structure from the prolonged base accumulation zone confirmed the upside scenario. But failure to hold $5.30 could be a fakeout, especially if coincided with a declining volume.
Therefore, the $5.30 level turned out to be a critical turning point. Holding above this could confirm continuation. A rejection, however, may trigger a deeper pullback.
DOT liquidation heatmap
The Liquidation Map showed large long leverage positions between $4.54 and $5.09.
DOT had more long balance than the short balance, with 25x and 50x leverage, hence showing that the traders were aggressive as they entered expecting an upward momentum.
The price of $5.14 was almost below the key resistance zone at $5.30, where significant long positions could be closed.
This was due to the periphery of the trend was perhaps holding steady at the perceived profits’ level of trade.
The volume of short liquidations could secure an upward, mild movement from $5.16 to $5.30. Still comparatively lower positions, it signals that bears may not yet pull heavily on the downside.
Source: CoinGlass
Break above or breakdown below—pick a side
A breakthrough above $5.30 could cause short liquidations and generate upward pressure that could find its way to $5.50 – $5.75 area.
On the other hand, if the price dropped to $5.09 or lower, the tightly grouped high-leverage longs might be liquidated.
That might accelerate a drop towards $4.80 or below. Despite the technical setup and bullish sentiment, DOT’s Active Addresses fell to 62.1K at press time.
That decline suggests network activity remains subdued, potentially weakening on-chain support for a breakout.
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