Polkadot [DOT] slides back to key support – Will bulls prevail?

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

• The structure was bearish on the 4-hour chart.
• Longs dominated, but demand fluctuations could delay bulls’ efforts

Polkadot [DOT] saw elevated selling pressure as the FOMC meeting began on 2 May. It dropped to $5.596 before attempting recovery on the same day. At press time, DOT traded at $5.664 and was still within a key support zone and bullish order block. 

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Similarly, Bitcoin [BTC] struggled to close above $28.8k – a key price ceiling in March and early April at press time. This could delay a strong recovery for DOT unless BTC reclaims $29k. 

Moreover, a recent report revealed that Polkadot saw an impressive performance on socials. But development activity remained low and could undermine a strong recovery too. 

More downward pressure – Will bulls withstand it?

Source: DOT/USDT on TradingView

DOT’s price action was below short and long-term trends (50-EMA and 100-EMA). In addition, both the EMAs were down sloping, reiterating elevated sellers’ action since mid-April. 

However, low wicks within the bullish order block and support zone of $5.61 – $5.86 (cyan) show bulls could fight for control for a while. The RSI recovered slightly from the oversold zone, and the support has been steady since mid-March. 

Near-term bulls could attempt a recovery, especially if BTC reclaims $29k and surges. In that case, DOT/USDT pair could rally to the bearish order block and supply zone of $6.60 – $6.92. 

A close below $5.600 (current support zone) could expose DOT to more short-term selling pressure. It could push DOT to retest the March swing low of $5.15. 

Longs dominated; demand fluctuations persist

Source: Coinglass

Coinglass data revealed that buy positions dominated at 52.96% against sell positions at 47.04% in the past 4-hour period. It showed bulls could have a recovery chance. 

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However, fluctuations in open interest (OI) rates in the past two days could undermine bulls’ efforts. Notably, the OI hit $171.89 million on 1 May before surging to $176.58 million on 2 May. 

On 3 May (press time), the OI peaked at $177.31 million before dipping slightly to $171.52 million. The demand fluctuations in the futures market could delay a strong recovery. 

Source: Coinglass