Polkadot's Price Consolidation Phase Expands, Awaiting Breakout

According to CryptoPotato, Polkadot's price has been in a prolonged consolidation phase, with the price trapped between the significant resistance region of $7.4 and the crucial support zone of $6.4. A valid breakout from this range is crucial for determining Polkadot's future trajectory. The daily chart reveals an extended sideways consolidation phase, creating uncertainty in the market regarding Polkadot's future direction. The price is bounded by critical resistance at $7.5, which aligns with the significant 200-day moving average, and crucial support at $6.4. Recently, Polkadot found support near the lower boundary of this range and rebounded significantly, reaching the upper threshold. If buyers can push the price above the $7.4 resistance and the 200-day moving average, a sustained bullish trend could follow. Conversely, if supply increases, a bearish reversal towards the lower boundary becomes feasible. The price action around this crucial resistance zone will dictate the cryptocurrency's short-term trajectory. In the 4-hour timeframe, Polkadot fluctuated within an ascending wedge pattern for an extended period. Recently, the price found support near the wedge's lower boundary. Following a resurgence in demand, Polkadot experienced a spike, retracing towards the crucial resistance region, which includes the 0.5 Fibonacci level. This resistance has been a major barrier during the recent consolidation stage, halting upward momentum. If buyers manage to breach it, the next target will be the wedge's upper boundary in the mid-term. Conversely, a bearish reversal could lead to another downward move, aiming for the wedge's lower boundary. A valid breakout from this pattern is required to determine the price's upcoming direction. Amid uncertainty surrounding Polkadot's price trajectory, it is crucial for market participants to analyze futures market sentiment to assess the cryptocurrency's future potential. The liquidation heatmap metric, highlighting where the most liquidity resides, illustrates that during a period of sideways consolidation, a significant amount of liquidity has formed above the range's high of $7.5, consisting of numerous buy-stop orders. Consequently, Polkadot buyers may target this potential level of liquidity in the short term, possibly triggering a notable short-squeeze event. However, closely examining the price action around this crucial juncture is essential for determining the cryptocurrency's forthcoming direction. It is worth noting that a fake breakout could occur, aiming to clear the liquidity and cause a cascading effect, potentially manipulating the market.