Polkadot’s next move: Will DOT drop to $5.542 or surge to $6.649?

• Despite negative market sentiment, analysts remain optimistic. 
• DOT could decline to $5.542 in the short term or in a bullish scenario, surge to $6.649. 

Polkadot [DOT] has experienced considerable decline in the last seven days as various altcoins dropped on their price charts. DOT prices fell by 9.69% over the past week.

At press time, DOT was trading at $5.85 with a $8.4 billion market cap, according to data from CoinMarketCap. Like other altcoins, DOT has faced external market forces such as volatile BTC prices, thus lowering prices.

Despite the decline, many crypto analysts remain optimistic, predicting an upcoming price surge.

According to pseudonymous analyst Crypto Thanos, DOT is set for a surge.

“DOT flushed March and November 2023 levels on higher time frames, making me even more bullish in the upcoming move; dips will vanish soon”.

Based on the analysis, DOT will respect the lower support level and start an uptrend.

Equally, Rekt Frencer shared a post on X, arguing that the future is bright. In the post, he added,

“DOT has recently entered the AI race. Projects like @origin-trail and Phalanetwork are already leveraging Polkadot tech for AP. If the trend continues, Polkadot could become the go-to hub for AI projects.”

The analysis remains optimistic that the adoption and the collaboration between Polkadot and other firms will help the price surge.

Source: Tradingview

What DOT’s fundamentals tell us 

AMBCrypto’s analysis indicates that on the 18th and 19th of June, and as of the time of writing, DOT breached the critical support level around $6.

The decline caused DOT to fall to the lowest price reported late last year at $5.505. At press time, DOT aims to reclaim the critical support level as a resistance level of around $6. It will establish a new resistance level around $7.3 if that holds.

Source: Tradingview

However, the RSI at 34 shows continued bearish market sentiment. The RSI crosses RSI-based MA from above, dipping further towards the oversold zone. These movements indicate higher selling pressure, driving prices down.

Looking further, Coinglass data on weighted funding rate shows a declining funding rate after reporting below negative on the 18th and 19th. Declining funding rates show investors’ unwillingness to open long positions, resulting in market neutrality.

Source: Coinglass

According to Santiment, DOT has reported declining open interest from 8th June. Falling open interests imply fewer new positions, with traders closing existing positions.

Since DOT has declined, many investors would avoid entering positions because of price impact.

Source: Santiment

Read Polkadot’s [DOT] Price Prediction 2024-25

Short-term possible price movements

DOT has faced negative funding rates for two consecutive days with reduced open interests. These movements indicate a solid bearish market sentiment.

In the short run, all factors indicate a continued downside and fall to its previous low at $5.542. However, if there’s higher buying pressure, it would surge to $6.649.