After a period of very active trading, where I made profits but ultimately lost much more, I have decided to return to swing trading, as you can likely tell from the timeframe of this analysis. Accordingly, my analyses will now be structured with a broader outlook.
Polkadot is currently in an Intermediate 1โ2 setup, which itself forms part of Primary Wave 3. My primary expectation is for an impulsive move toward the $5 level. However, this may prove challenging given seasonality effects, as September has historically tended to produce losses rather than gains.
From the order book perspective, we see several clusters of orders positioned above the current price, which is initially bullish. The liquidity heatmap, however, shows significant liquidity both above and below us, raising the possibility that the current move upward could merely be a liquidity grab before another downward leg.
Derivative data does not currently suggest an over-leveraged market or excessive greed or fear. Funding rates are holding steady at normal levels, and open interest is stagnant to slightly rising.
In summary, I remain long on DOT and expect an impulsive rally to follow soon.