Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- Selling pressure eased at the key $5 psychological level.
- Shorts still held the upper hand in the futures market.
The descent of Polkadot [DOT] below the $5.23 support level, the one-week formation ended on the 12-hour price chart. However, the selling pressure eased, allowing the price to stabilize at the $5 psychological level and giving bulls a good chance to recover.
Read Polka Dots [DOT] Price Forecast 2023-24
A successful bullish attempt would depend on Bitcoin [BTC] reclaiming the $29.5k price level with the king coin’s flashing bullish signals, as of going to press.
With selling pressure easing, is DOT ready for a rebound?
Source: DOT/USDT on trade view
While the price of DOT fell, Polkadot shone socially. This was highlighted by a statistical report on the network’s rising social engagement. As social sentiment continues to rise, this could have an effect on the price of DOT.
After sellers reversed the $5.23 price level on Aug. 1, buyers quickly attempted to recover. However, the price rejected at the new resistance level. So this led to a price drop of 5% in the last 48 hours.
Conversely, the stagnation of bearish momentum in the $5 bulls price zone presents an opportunity to reverse the bearish trend.
The Relative Strength Index (RSI) rose slightly to 39, with the increase signaling renewed confidence. The Chaikin Money Flow (CMF) also moved above the zero mark with a reading of +0.06 to indicate an inflow of capital.
A bullish reversal from current levels will need to close above the $5.23 price level for continued gains. Another price rejection at that level could cause DOT to take bigger losses and push it towards the $4.4 – $4.6 price zone.
Muted reaction in the futures market
Source: Mint glass
How much are 1,10,100 DOTs worth today?
While DOT presented an opportunity for a bullish recovery, there was little to no response from the futures market. Shorts continued to define the long/short ratio with a 52.1% share of open contracts.
Therefore, traders should be careful when opening new positions to avoid being caught off guard by a bullish rebound or an extension of the current price dip.