Polkadot (DOT) Price Reclaims Critical Support, What Next?
Polkadot (DOT) price has reclaimed an important support level and is showing some bullish signals. It is expected to recover in the coming days.
Key Support Level
The price of Polkadot (DOT) declined after being rejected by a long-term resistance zone at $9.5 on December 26, 2023 (red arrow). During this period, the price broke below the important support level at $6.6 on January 22, which could have triggered a further sell-off towards the next significant support at $5.2.
However, instead of following that path, the price only touched a low of $6 and then reclaimed the $6.6 level in the subsequent days. This action created a deviation (highlighted by the red ellipse) and could lead to a strong recovery.
In fact, the price confirmed the $6.6 level as support on February 1 (indicated by the green arrow), further reinforcing this possibility.
The daily RSI indicator broke above the bearish divergence line, suggesting that the bulls are attempting a comeback in the short term.
Therefore, the DOT price may rise by 23.91% to the nearest horizontal resistance at $8.5 in the near future.
The weekly chart shows that DOT price bounced off the 20-week EMA (indicated by the green arrow) and formed a bullish Pin bar last week. This indicates a shift in sentiment from selling on rallies to buying on dips.
The weekly RSI maintains a bullish structure and is above 50, indicating that the advantage still lies with the bulls.
Hence, the long-term trend for DOT remains positive, and any pullbacks to the 20-week EMA are considered buying opportunities.
The most likely scenario suggests that the DOT price will increase towards the nearest horizontal resistance at $8.5 in the coming days.
Disclaimer: Please note that this article is for informational purposes only and should not be taken as investment advice. As an investor, it is important to do your own research before making any decisions. We are not responsible for any investment decisions you make based on this information. Not Financial Advice.
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