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Polkadot [DOT] consolidates near key support – is a reversal imminent?

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DOT bulls held onto key $5.2 support level. However declining volume could see the support level cave to selling pressure.

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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 hovered around the key $5.2 support level.
  • Buyers held a 50.3%  advantage in the long/short ratio, as of press time.

Polkadot [DOT] hasn’t been left out of the recent market correction. Since 1 May, DOT has suffered losses of over 13%. This pushed it to the March low of $5.2.

Realistic or not, here’s BNB market cap in BTC’s term

However, Bitcoin [BTC] climbing to $27k could spur some bullish momentum for DOT with bulls defending the $5.2 support level over the past seven days.

Bulls manage to hold onto the $5.2 support level

Source: DOT/USDT on Trading View

DOT’s market structure remained bearish on the daily and 12-hour timeframes. The sharp drop in mid-February saw DOT break through the $7 and $6 support levels. However, the $5.2 support level held steady and bulls rallied back to the $7 price zone.

The new resistance level at $7 halted the bullish rally along with the bearish order block under it. This pushed the altcoin back toward the $5.2 support level again. Although the support level remained steady at press time, sellers seem to be edging towards a break of the level. DOT posted three bearish candles in a row on the 12-hour timeframe to signal increased selling pressure.

With the On Balance Volume (OBV) recording a dip in volume and the Relative Strength Index (RSI) hovering around the oversold zone, it indicated eased buying pressure and more outflows. This signaled that near-term sellers had a slight advantage. A 12-hour candle close below the $5.2 support will see bears aim for the January low of $4.2.

On the flip side, if the $5.2 support level holds again, bulls will make another approach for the $6 resistance in the near term and $7 in the long term.

Fluctuating signals in the futures market

Source: Coinglass

Liquidation data from Coinglass showed that longs bore the brunt of losses with huge spikes over a month-long period. A look at the 24-hour liquidation highlighted $198.61K worth of long positions stood wrecked as against just $1.58K shorts.

Is your portfolio green? Check out Polkadot [DOT] Profit Calculator

However, the long/short ratio had buyers holding a slight advantage of 50.3% on the 12-hour timeframe. Further upside for BTC could influence a reversal opportunity for DOT.

Source: Coinglass


Saman Waris works as a News Editor at AMBCrypto. She has always been fascinated by how the tides of finance and technology shape communities across demographics. Cryptocurrencies are of particular interest to Saman, with much of her writing centered around understanding how ideas like Momentum and Greater Fool theories apply to altcoins, specifically, memecoins. A graduate in history, Saman worked the sports beat before diving into crypto. Prior to joining AMBCrypto 2 years ago, Saman was a News Editor at Sportskeeda. This was preceded by her stint as Editor-in-Chief at EssentiallySports.
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