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Polkadot (DOT) tested support levels on Friday after being in the red for almost a week. However, DOT was able to bounce back from the support level as it continued to find buyers in the $4.20 range.
Traders and market experts are closely watching the $4 and $4.20 price levels, which have emerged as key psychological support levels.
A Tough Week for Polkadot (DOT)
Polkadot (DOT) endured a bearish week after falling into the red on Sunday, ending the week down 3.21%. As buyers lost momentum, sellers were able to regain control, and DOT fell more than 5% on Monday, sliding below its 20-day SMA to settle at $4.56. Buyers attempted to regain control on Tuesday, as DOT rose to a daily high of $4.66. However, sellers thwarted the recovery attempt, and DOT fell back into the red for the third consecutive day, losing the $4.50 level to settle at $4.38. Selling pressure continued on Wednesday, sending DOT down 2.74% to $4.26, as sellers attempted to push the price back below the $4.20 support level.
Source: TradingView
As DOT approached the support level, buyers attempted another recovery on Thursday, with DOT reaching a daily high of $4.40 as it attempted to reclaim $4.50. However, as demand waned from higher levels, DOT fell again, posting a slight 0.23% drop. The important thing to note is that buyers held DOT above the support level at the close. DOT tested the support level on Friday as sellers pushed the price down to the daily low of $4.10. Sellers lost momentum as buyers entered the market between $4 and $4.20, and the price rose 0.94% to $4.29. DOT is currently trading at $4.32, up 0.70% in the session. If buyers can sustain this recovery, they will be looking to reclaim the $4.50 price level. With strong support at the $4.20 level, sellers were unable to exert influence at lower levels.
Feeling uncertain
The market sentiment around Polkadot (DOT) remains uncertain. At the same time, the $4.20 level has acted as a support level, preventing the price from going any lower. However, it has not yet gathered momentum and started a significant recovery. The MACD indicates that if the trend around DOT continues to be sluggish, the bears may gain the upper hand. Open interest also decreased last week, but has reported a slight increase in the past few days.
Source: Coinalyze
So where does DOT go from here? If the buyers can hold DOT above the support level and push it above $4.50, the price could push back up to $5. However, for this scenario to happen, DOT would have to stay above $4.20. But what happens if sentiment changes? If the sellers regain control and push DOT below $4.20, the price could fall to $4, and the buyers could try to start a relief rally. If this level breaks, DOT’s multi-year support level of $3.60 will come into focus.
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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