Looking to long Polkadot? What you should consider
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- DOT previously faced a price rejection at $4.800.
- Open interest rates wavered amidst mild buying pressure.
On 14 June, we explored the short-term likelihood of Polkadot [DOT] derailing at the critical bearish zone around $4.8. The prediction was confirmed after Bitcoin [BTC] faltered at $26.6k, prompting most altcoins, including DOT, to surrender recent gains.
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What’s in store as DOT retests the same bearish level?
Recently, Polkadot re-invented its Web 3 governance through OpenGov, giving extra control to DOT holders. But the development didn’t inflict an upside for DOT on the price charts, given the prevailing regulatory and macro headwinds.
Polkadot: Is another price rejection at $4.8 likely?
At press time, DOT’s RSI (Relative Strength Index) faced rejection at 60-mark and eased to the neutral level. It highlights a drop in buying pressure. Similarly, the rising OBV (On Balance Volume) registered a downtick, indicating a slight decline in demand.
The $4.53 – $4.80 zone (white) is an FVG (fair value gap) formed during the 10 June plunge. So, if BTC falters at $26.6k again, buyers’ exhaustion could set in, driving DOT to retest the immediate support level of $4.328.
A rebound from this immediate support level could tip DOT to rally toward the bearish zone again. So, bulls could watch out for the $4.2 – $4.328 retest and target $4.8.
A drop below $4.2 will invalidate the bullish thesis and could make a crash toward $4.0 a reality.
Mild buying pressure amidst wavering OI
After a sharp drop on 15 June, the CVD (Cumulative Volume Delta) rose in a sluggish manner, denoting mild buying pressure. The weak buying volumes could be attributed to open interest (OI) rate fluctuations.
How much are 1,10,100 DOTs worth today?
OI accounts for the number of open contracts in the futures market. An uptick will denote a bullish bias, while a decline a bearish bias. A wavering OI shows a lack of a trend, which could point to an imminent range extension of $4.2 – $4.8.
However, wild BTC price swings could break the range, hence it is worth tracking.