Polkadot [DOT] dropped to a key support zone; can bulls prevail?


Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

  • DOT was neutral after a sharp decline on the 12-hour chart.
  • A price reversal could occur if the demand increases in the crucial support zone.

The value of Moles [DOT] fell after bitcoin [BTC] it broke below the $23.5K level. At press time, the DOT was trading at $6,225, down more than 4% in the last 24 hours. Similarly, BTC was closest to retest or break below the $23K level.

Read Moles [DOT] price prediction 2023-24

However, the DOT slide hit a critical support zone, which could act as a turning point if demand for the asset rises to the level.

$6.0 – $6.2 Support Zone: Can It Hold Steady?

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Source: DOT/USDT on TradingView

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Polkadot’s January rally was held back by two phases of price consolidation. The second phase of price consolidation was the most challenging, as it broke below the uptrend line at press time.

But the decline reached a critical support zone of $6,013 – $6,200. The zone was a resistance level before becoming the current support level. If DOT demand rises to this level, DOT could see a price turnaround and reverse losses from the sharp decline.

Such a rally could move the DOT above the uptrend line to retest the overhead resistance level of $6,804. Also, if BTC recovers to the $23,500 level and then rises, the DOT could recover to its pre-FTX level of $7,124.

On Balance Volume (OBV) rose steadily, showing a pick-up in trading volume and buying pressure that could fuel potential DOT uptrend momentum.

But the RSI was at 50, showing a neutral structure; therefore, the price direction was not final. The previous bullish bias will be invalidated if the bears break below the support zone (green) at $6,000. The decline could be stopped at $5,754 or the 100-period EMA.

DOT saw increased development activity and demand

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Source: Feeling

According to Santiment, DOT registered an impressive building on the network, as evidenced by the increasing development activity. Increased development activity also coincided with rising DOT prices.

Additionally, DOT saw a rebound in the funding rate, indicating increased demand and bullish sentiment in the derivatives market. Similarly, sentiment-weighted retreated significantly from negative territory, signaling a better investor stance on the asset. The above trend could fuel the recovery and the uptrend of DOT.