Polkadot price sideways as technical barrier remains a black beast for bulls
- Polkadot price moves sideways as bulls lose grip over the technical level.
- DOT price could see price action deteriorate once dollar strength kicks in.
- With the US Fed decision coming into play next week, expect a plunge back to $6.85.
Polkadot (DOT) price action has seen bulls only enjoying life very briefly above the monthly pivot near $8.00. The biggest issue here seems to be the combination of the 55-day Simple Moving Average (SMA) and that same monthly pivot, both of which imposed a tough cap on price in late August. DOT price will probably slide further as US Fed expectations recalibrate following the release of likely still-elevated US inflation data later this afternoon.
DOT price sees fade in RSI as telling story
Polkadot price still looks to be going for its fifth straight failure in a row in its assignment to break and close above the monthly pivot and the 55-day SMA. This hurdle is very important for bulls to break and then retest before they can start thinking of pushing price action further up to $9.00. The window of opportunity is set to close quite quickly as the Fed is gearing up for another 75 bp hike next week, outpacing the ECB and inflation numbers out this afternoon are crucial in going forward.
DOT price might still pop intraday above the 55-day SMA, but so far it has been unable to manage either a daily close or open above the level. Bulls are burning fuel rapidly as bears gain momentum, which could turn into a distribution phase before the next pullback. A fast forward after the CPI numbers this afternoon will see a stronger dollar by Wednesday or Thursday, once the dust settles that inflation will remain elevated, although not at the previous highs anymore, and this will trigger a return to $6.85 by the end of this week.
DOT/USD Daily chart
As mentioned above, a plain and simple daily close or bullish open above the 55-day SMA would do the trick in solidifying a bullish leg higher. Expect to see more investors flocking in to get on the back of the rally and for price action to quickly print a rise to $9.00. A similar scenario would be needed with a close above the monthly R1, to support some profit taking and limit any fades that might occur.
Author
Filip Lagaart
FXStreet
Filip Lagaart is a former sales/trader with over 15 years of financial markets expertise under its belt.
