Is Polkadot [DOT] on the verge of initiating another recovery?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- DOT’s price remained at crossroads.
- Promising metrics could aid bulls’ rebound attempt.
Bitcoin’s [BTC] rally to $30k on 9 August spurred bullish sentiment in the market. Despite, Polkadot’s [DOT] market structure staying bearish, a bullish recovery looked likely, due to the market showing signs of revival.
Read Polkadot’s [DOT] Price Prediction 2023-24
Consequently, DOT posted decent gains of 4.5% over the past 48 hours to raise its price to $5.05, as of press time. If DOT can remain above $5 and BTC continues its bullish rally, a significant price rebound could be in the making for the native token of the Polkadot network.
Sellers lose steam after cracking the $5.23 support level
After a double price rejection on 14 July and 21 July at the bearish order block ($5.6-$5.85), bears broke the bullish defense of the $5.23 support level. However, sellers couldn’t extend the gains with buyers able to prop up the price at the $5 level.
With the general market experiencing a price uptick, DOT buyers could benefit. The Chaikin Money Flow (CMF) highlighted the growing confidence of buyers. The indicator pushed firmly from the zero mark and stood at +0.20 to show rapid capital inflows.
Similarly, the Relative Strength Index (RSI) revealed recovering buying pressure, as it edged closer to the neutral 50. This was after a spell around the oversold zone.
Bulls can expect to challenge bears for ownership of the fundamental $5.23 price level. If bulls successfully flip the level back to support, further gains could lie at $5.50 to $6. A rejection at this level could sink DOT lower toward $4.5, especially if BTC doesn’t sustain its price rally.
Buyers can be encouraged by a positive funding rate
DOT’s funding rate flipped positive over the past 24 hours, per Coinglass. This could spur buyers in their quest for a price reversal.
How much are 1,10,100 DOTs worth today?
Meanwhile, the exchange long/short ratio highlighted the shifting momentum toward buyers with longs holding a slim 50.1% advantage on the four-hour timeframe. This hinted at a near-term rally which could translate to more gains on the higher timeframes.