- Selling pressure pushed DOT past the $5.7 support level.
- Signals suggested that a bullish recovery was on the horizon.
Polkadot [DOT] began the year on a bullish note, posting gains of 84.7% to reach a YTD high of $7.9, as of 19 February. Since then, the price has almost wiped off those gains, with sellers dominating the market.
Read Polkadot’s [DOT] Price Prediction 2023-24
However, as of press time, Bitcoin’s [BTC] close above $29k could kickstart a substantial recovery for DOT.
Selling pressure has been relentless with no pushback from bulls
DOT has been on a steep downward trend since 18 April. Price smashed through the $6.4 support level before bulls found some respite at the $5.7 support level.
However, this didn’t last long as sellers broke past the $5.7 support on 1 May. On the daily timeframe, sellers have maintained the pressure with price trading under the $5.7 area for three days.
While the overall structure for DOT remained bearish, a few signals point to a bullish pullback on the horizon.
On the four-hour chart, DOT posted three bullish candles in a row, causing the RSI to climb above the neutral 50 mark. The OBV also rose by 1.73 million.
A near-term recovery plan for bulls will involve a daily candle close above the $5.7 resistance level. This could spur a push to reclaim the $6.4 level. On the flip side, bears could continue the downward push with the $5 psychological support level as the next target.
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Funding rates on the rise as longs marginally edge shorts
Coinalyze‘s data showed a significant rise in funding rates over the past 72 hours. As of the time of writing, funding rates remained positive–a bullish sentiment that meant demand was picking up. This could serve as a signal for a bullish recovery.
Additionally, the long/short ratio for DOT saw buy positions with a 52.5% advantage over sell positions at 47.5% in the past four-hour period. Traders can look out for a daily close above $5.7 for long positions.