Polkadot [DOT]: Can bulls rally from this critical support level?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Selling pressure eased at a critical support level.
- Spot CVD registered an uptick, as demand picked up for DOT.
Polkadot’s [DOT] price action stalled at a key support level, as bulls made a last stand against the bearish momentum at the $4.24 support level on the daily timeframe.
Read Polkadot’s [DOT] Price Prediction 2023-24
Previously, the bearish market structure on the higher timeframes saw DOT drop by a further 9% on 31 August. While bears maintained the upper hand, the $4.24 support has historically served as a rallying point for buyers. This could influence DOT’s movement over the coming days, as bulls look to mount a price reversal.
Buyers presented with an opportunity to reverse recent losses
The sharp rise of the Chaikin Money Flow (CMF) to +0.15 over the past 48 hours showed strong capital inflows, as buyers look to rally again from this support level.
A look southward revealed the buying strength present at the $4.24 support level. Earlier, DOT rallied from this support level in January and June with the rally in June providing a bullish order block (OB).
The confluence of price at the support level and bullish OB along with the on-chart indicators favor a bullish rebound. This could see buyers target the $4.5 to $5 price levels. However, a bearish break below the level could take DOT to the weekly timeframe lows of $3.6 to $4.
Market sentiment could be shifting bullish, as spot CVD slowly rose
In the past 48 hours, DOT’s Spot CVD registered a significant uptick. This was according to data from Coinalyze. It revealed that demand was beginning to rise since DOT’s price reached the critical support level.
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Likewise, the Funding Rate stayed positive to signal the absence of sellers, which meant Polkadot was likely to rally from the current price level.