Polka dot [DOT] fell to an important support area; Can bulls prevail?

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

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

The value of the Polka dot [DOT] Lost after bitcoin [BTC] It broke below the $23.5 thousand level. At press time, DOT is trading at $6,225, down over 4% in the past 24 hours. Similarly, BTC was closer to retesting or breaking below the $23k level.

Read Polka dot [DOT] predict the price 2023-24

However, the fall of DOT hit a critical support area, which could act as a turning point if demand for the asset increases at the level.

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

Source: DOT/USDT on TradingView

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Polkadot’s rally in January was slowed by two phases of price consolidation. The second phase of price consolidation has been the most challenging as it has broken down below the uptrend line at press time.

But the fall hit a critical support area at $6013-$6200. The area was a resistance level before it turned into the current support level. If demand for DOT increases at this level, DOT may experience a price reversal and reverse the losses from the sharp decline.

Such a rally could move DOT above the ascending trend line to retest the upper resistance level at $6,804. Also, if BTC reclaims the $23.5k level and rises after that, DOT could reclaim the pre-FTX level of $7,124.

Balance Volume (OBV) has been steadily rising, indicating an uptick in trading volume and buying pressure that could add to the potential bullish momentum for DOT.

But the RSI was 50, indicating a neutral structure; So the price direction was not final. The above bias will be invalidated if the bears break below the support area (marked in green) at $6,000, and the move could be halted at $5,754 or the 100-period moving average.

The Ministry of Transport has seen an increase in development activity and demand

Source: feeling

According to Santiment, the Department of Transport registered an impressive building in the network, as evidenced by the increased development activity. The increased development activity also coincided with the increase in the prices of the Ministry of Transportation.

In addition, the DOT saw an increase in the financing rate, which indicates an increase in demand and a bullish sentiment in the derivatives market. Likewise, weighted sentiment has eased significantly from negative territory, indicating an improvement in the investor’s stance on the asset. The above trend could support the recovery of DOT and the upside.

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