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Polkadot is facing a critical trading level, with the price testing the $5 level. DOT fell by about 12% last week and could fall below $5 if buyers fail to overcome selling pressure.
DOT is currently in a descending channel pattern, which would normally lead to higher prices, but only if the price can cross the upper trendline upwards.
Polkadot (DOT) looks set to stay above $5
Polkadot (DOT) has been trying to fend off the dominant selling pressure since last Saturday as buyers tried to keep the price above $5. DOT had been trading between $5.50 and $6.50 since early June. However, the bears overwhelmed the lower end of this range, causing the price to drop below $5.50 this week. Already on a downtrend, DOT was in the red all week after sellers thwarted buyers’ attempts to push it to $6. DOT fell 1.05% on Monday and fell another 2.30% on Tuesday to close at $5.53.
Source: TradingView
After a 2.53% drop on Wednesday, DOT fell to $5.39 before the price dropped below $5.50. As you can see in the chart above, selling pressure intensified on Thursday. Sellers pushed DOT to a low of $5.02. However, strong demand at this level allowed DOT to fight back and settle at $5.34, down 0.93%. DOT failed to recover on Saturday, with the price falling 4.12% to $5.12. In the current session, DOT is up 1.17% as buyers enter the market close to the support level.
Can buyers regain control?
Polkadot (DOT) has bounced from $5 twice in the past few sessions and has bounced back in the current session. This indicates strong support and demand at this level. However, buyers are losing momentum as demand is decreasing from higher levels. Buyers need to push above $5.50 for demand to recover. A consolidation above this level could help find a path to retest $6, which it has not been able to surpass since early July. The RSI approaching overheated selling conditions could indicate that DOT is finally able to stop the decline and regain lost ground.
Polkadot (DOT) Still Making Great Progress
Despite its price issues, Polkadot (DOT) is making significant progress within the cryptocurrency ecosystem, demonstrating interoperability and usability. Recent developments have further highlighted its impact in several sectors. Mythos has emerged as one of the prominent projects in the Polkadot ecosystem, gaining over 5 million players in its first year. Polkadot is also working to address issues that have historically hindered adoption. Nova Wallet has made significant improvements to the network’s UI, making it more accessible to users.
Polkadot’s on-chain metrics also remain bullish, with the network reporting 1.3 million daily holders. Data from Polkadot Subscan shows a 19.21% increase in daily active users. Analysts are also bullish on the DOT price, with one analyst predicting a 2x bullish rally.
Disclaimer: This article is provided for informational purposes only. It is not provided or intended to be legal, tax, investment, financial or other advice.
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