Polkadot (DOT) has been one of the standout performers in the crypto space recently, showing strong bullish movement throughout the last month. However, despite a recent surge that saw the price peak at $11.65 in early December, technical indicators suggest that a short-term pullback could be on the horizon. While Polkadot faces a potential dip in the near future, its long-term price outlook remains optimistic, with analysts projecting a target of $24 by the first quarter of 2025.

Short-Term Bearish Divergence Signals Possible Pullback

Polkadot’s recent price rally has been fueled by strong buying activity, which is reflected in the On-Balance Volume (OBV) reaching new highs. This shows that investor demand has been robust, pushing the token’s price upward. However, a bearish divergence has emerged, which could lead to a correction. The Relative Strength Index (RSI), a key momentum indicator, has been making lower highs despite Polkadot’s price pushing higher, signaling that upward momentum may be losing steam.

Such divergence is typically a precursor to a price pullback, suggesting that Polkadot could experience a brief period of consolidation before continuing its upward trajectory. In the short term, this could lead to a dip below the $10.5 level, which has not yet been solidified as a support zone. This retracement is expected to be temporary, as long-term indicators remain bullish.

Key Support and Resistance Levels

For Polkadot to maintain its bullish momentum, it must hold key support levels. The $10.5 area is pivotal in the near term. If Polkadot can successfully flip this resistance zone into support, it will signal that the bullish trend is intact, with higher targets on the horizon. In that case, Polkadot could aim for the $16.35 resistance level, and possibly even reach the $23.85 mark in the coming weeks or months.

On the flip side, if Polkadot fails to sustain the $10.5 level and drops below the $8.56 or $7.55 price points, the long-term bullish bias could shift to a bearish one. However, such a drastic move appears unlikely given the strong buying volume and positive market structure. In the short term, a pullback toward key support zones like $8.4 could present a buying opportunity for those looking to enter at a lower price point.

The liquidation heatmap also points to critical levels for traders to monitor. Over the past few days, liquidation levels around $7.4 and $8.4 have become increasingly significant, further emphasizing their role as potential support zones. Meanwhile, the $9.9 and $11.3 areas are seen as short-term “magnetic” levels, which may attract price movement before it settles into a range.

Long-Term Bullish Sentiment: $24 Target for Q1 2025

Despite the short-term bearish divergence and potential pullback, Polkadot’s long-term outlook remains promising. The token’s robust market structure and ongoing development in the Polkadot network continue to make it a strong contender for future price appreciation. Key drivers of Polkadot’s long-term growth include its cross-chain interoperability, which is increasingly being adopted by a range of blockchain projects, and the overall bullish sentiment in the broader cryptocurrency market.

Analysts continue to project that Polkadot could reach $24 by Q1 2025, supported by growing adoption and demand for its ecosystem. As Polkadot continues to build momentum and gains wider recognition within the crypto space, its value could see significant growth in the coming months.

In conclusion, while Polkadot may face some short-term headwinds due to bearish divergence and market consolidation, its long-term prospects remain strong. Investors should keep an eye on key support levels, and once the market stabilizes, Polkadot could continue its bullish trend, aiming for the $24 target by early 2025.