Polkadot [DOT] can cross the $7 level if these conditions are met

Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion

       -The 12-hour chart was bullish.

       -The open interest rate dropped slightly, but the funding rate remained positive. 

Polkadot [DOT] followed Bitcoin’s [BTC] price action and entered a narrow consolidation after inflicting a breakout. Since 14 April, DOT has oscillated within $6.656 – $6.834, while BTC fluctuated in the $29.6k – $31k range. A BTC bullish breakout could tip DOT to continue with its recovery. 

Read Polkadot [DOT] Price Prediction 2023-24

Is the uptrend sustainable?

Previously, DOT traded sideways between $5.77 – $6.66 before breaking out. But the breakout has constrained into a new upper range. At press time, the price action was above 50 EMA and 200 MA, reinforcing overall bullish sentiment both in the short and long term. 

If bulls defend the resistance-cum-support level of $6.66, DOT may zoom to the $7 psychological level, especially if BTC reclaims the $31k. The next key resistance levels lay at $7.286, the bearish order block at $7.655, and the overhead resistance at $7.895. 

A break below $5.77 will be a sign of weakness. However, sellers must clear the dynamic supports and hurdles at 50 EMA ($6.369) and 200 MA ($6.240) to gain leverage.

These levels can act as short-selling targets in such a downswing scenario. The previous channel’s lower boundary of $5.77 may slow any further drop.

Meanwhile, the stochastic RSI hit the overbought zone – a bullish moment and a ripe condition for price reversal. But, the Money Flow Index (MFI) fluctuated near the overbought zone – indicating an increased influx of money into DOT’s futures market. 

Moreover, a rising ADX (Average Directional Index) insinuated that DOT’s uptrend continuation was highly likely. 

Funding rates were positive despite a drop in open interest rates

How much is 1,10,100 DOTs worth today?

According to Coinglass, DOT’s funding rates remained relatively positive throughout the first half of April – a bullish sentiment that means DOT enjoyed steady demand. This could tip bulls to push above $6.834, well only if BTC exceeds $30.4k and reclaims $31k.

However, the open interest (OI) rates declined slightly at press time. Although the drop could be attributed to the weekend, any further drop in OI from Monday (17 April) may tip the scale in favor of sellers.