- An analyst predicted that DOT might rise to $15.
- A jump above the $7.49 resistance could drive DOT toward $9.
AMBCrypto’s assessment of Polkadot’s [DOT] price action showed that the value almost tapped $7 on the 29th of January. However, the token failed to build on its earlier bullish momentum, as it dropped to $6.79.
Before the initial attempt, DOT experienced a significant correction. Due to this, the Year-To-Date (YTD) performance of the token was a 20.99% decrease.
But for analyst Michaël van de Poppe, that drawdown could be the end of the month-long correction.
Should you click the buy button?
van de Poppe shared this opinion on X (formerly Twitter). According to him, the approximately 30% correction means DOT has offered a buying opportunity.
He also mentioned that the potential move could push the token as high as $15.
Request 01 – $DOT
Great weekly candle across the board, including $DOT.
Had a 30-40% correction, which are massive opportunities within a bull market.
I think we're ready for the next upward impulse move, perhaps $15 for Polkadot. pic.twitter.com/mZdH7VzhzS
— Michaël van de Poppe (@CryptoMichNL) January 28, 2024
To assess this potential, AMBCrypto looked at Polkadot’s Funding Rate. When the Funding Rate is positive, it means open long positions are paying a funding fee. In this case, shorts receive the funding fee.
Conversely, a negative Funding Rate suggests that shorts are paying the fees while longs receive them. At press time, DOT’s Funding Rate was 0.01%, according to data from Santiment.
A positive Funding Rate when the price moves higher means sellers in the derivatives are in disbelief. The inference here could be the spot traders are buying aggressively.
Should the metric remain the same and the DOT’s momentum stays positive, the price might rise higher.
Source: Santiment
Bears are not out of the way yet
From a technical point of view, DOT might retest $7 and possibly jump past it. This was because the bulls seemed to be defending the $6.35 support. If DOT hits $7, the next point of interest would be $7.49 where the price was rejected many times.
Indications from the Moving Average Convergence Divergence (MACD) showed that sellers were still lurking around. At press time, the MACD was -0.01, indicating that the bullish potential had not been validated.
To validate this potential, Polkadot sellers need to make room for buyers’ dominance. When this happens the short-term moving average (blue) would flip the long-term one (orange).
Meanwhile, volatility around DOT has been increasing, the Bollinger Bands (BB) showed. If the volatility continues to increase, DOT might experience notable price fluctuations.
From a highly bullish perspective, the token’s performance could be characterized by a 10% jump. But if the MACD continues to paint a gloomy look, downward pressure might appear. If this is the case, DOT could drop below $6.50.
Meanwhile, the Awesome Oscillator (AO) mixed signal. As of this writing, the AO was negative. But the same indicator approached the histogram midpoint with glaring green bars.
Source: TradingView
The negative reading was a sign of downward momentum. But if the AO flips into positive territory, the oscillation might change in the bulls’ favor.
Two other metrics AMBCrypto considered were Social Dominance and Weighted Sentiment. Social Dominance can be used to assess the possible tops and bottoms of a cryptocurrency.
This is because it measures the rate of discussion around an asset when compared to others in the top 100.
According to Santiment, Polkadot’s Social Dominance had dropped to 0.3432. This implies that a lot of eyes were not looking in its direction.
However, historical data showed that a trend like this could foreshadow a bounce. So, as it stands, DOT has a good potential to rise higher.
The Weighted Sentiment, on the other hand, was also down. Based on press time analysis, the exact reading was -0.726. When the Weighted Sentiment is positive, it means that market participants are bullish.
Read Polkadot’s [DOT] Price Prediction 2024-2025
Since DOT’s Weighted Sentiment was negative, it implied that most traders were not optimistic about the price action. However, this could also bring the token to positive light.
One reason for this assertion was that DOT was not overheated. So, traders might need to be looking at the token before the potential rally arrives.
