Polkadot: This hurdle is keeping DOT from reaching $7
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- DOT’s bullish advance was limited by a bearish order block, despite strong upward momentum.
- Open Interest maintained an upward movement, as market speculators backed the bullish trend.
Polkadot [DOT] buyers have been persistent in July, resulting in favorable price gains. This has kept the altcoin’s upward trajectory despite the general market correction led by Bitcoin’s [BTC] decline below $30k.
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Polkadot’s on-chain development activity soared in Q2 2023 leading to the addition of four million unique addresses. Can this metric aid its upward movement?
The $5.23 support level remains critical for bulls
The bullish strength at the $5.23 support level was highlighted by strong bullish candles in the lower timeframes. This helped prop up DOT’s upward momentum on the higher timeframes.
Despite its uptrend and bullish market structure, the bulls have found the bearish order block between $5.63 and $5.88 a tough hurdle to cross. However, BTC recovering the $30k price level could spur a bullish break above the bearish OB.
In the interim, the on-chart indicators showed bullish intent. The Relative Strength Index (RSI) stood at 58 to highlight growing demand. The Chaikin Money Flow (CMF) stayed positive, although it dipped slightly from +0.17 to +0.10.
A drop below the $5.23 level would be a sign of a bearish takeover in the short term, considering its existence as a strong defense for bulls. On the other hand, if bulls can conquer the bearish OB, DOT could climb to $6.1-$7 in the short term.
Rising Open Interest highlights growing bullish confidence
How much are 1,10,100 DOTs worth today?
Open Interest (OI) data from Coinalyze showed growing bullish conviction. The OI has been on a gently rising slope since early July. The past 24 hours saw it register a sharp $10.4 million uptick indicating the willingness of buyers to back the uptrend.
Similarly, the funding rate has been positive over the same period. Together, it signaled that DOT bulls were actively on the hunt for a sustained bullish rally toward the April high of $7.