Polkadot's price action has been marked by steady yet uncertain movements within a defined range, indicating a balance between buyers and sellers. A decisive breakout from this range is crucial to determine the cryptocurrency's future trajectory.

Technical Analysis

On the daily chart, Polkadot has been consolidating between $6 support and $7.5 resistance. The recent bullish rebound was met with selling pressure, suggesting a short-term decline towards the lower boundary of the range. However, a breakout from this range is needed to provide clarity on Polkadot's future prospects.

On the 4-hour timeframe, an ascending wedge pattern has formed, raising concerns about a potential bearish trend continuation if the lower threshold is breached. Intensified selling pressure near the crucial resistance level of $7.5 has led to a bearish reversal, with the lower trendline of the wedge serving as the next target.

Sentiment Analysis

Understanding perpetual futures market dynamics is crucial for grasping short-term price movements in DOT. Liquidation events often drive significant price shifts, particularly after consolidation periods. A notable liquidity pool is observed above the $7.5 level, which could trigger a significant liquidation event and rapid downturn if reached.

Conclusion

Polkadot's price action is currently characterized by steady but uncertain movements within a defined range. A decisive breakout from this range is crucial to determine the cryptocurrency's future trajectory. Both technical and sentiment analysis suggest potential short-term decline, but the long-term outlook will depend on how the price reacts to key resistance and support levels. As always, investors are advised to conduct their own research and exercise caution when making investment decisions.