Polkadot (DOT), a blockchain project known for connecting different blockchains, is facing a test. The price of DOT has been stuck between $7.25 and $6.16 for the past two weeks, raising concerns about a potential drop.
Technical indicators aren’t painting a pretty picture for DOT in the short term. The coin’s price has fallen below the Ichimoku Cloud, a sign of a bearish trend. Other indicators like the Bollinger Bands suggest potential oversold conditions, which could lead to a temporary price increase if buying pressure picks up.
The big question for investors is whether DOT can hold the key support level of $6.20. If it does, this could create a base for a price recovery, especially if DOT can break above minor resistance at $6.30. However, a drop below $6.20 could trigger further selling and push the price down to $6.00.
But there’s a silver lining. Prominent crypto analyst Michaël van de Poppe sees this weakness as a buying opportunity. He believes DOT’s descent towards the $6.20 support zone presents a chance to accumulate the asset at a potentially discounted price. This strategy aligns with the growing interest in Real World Assets (RWAs) on the Polkadot network, which van de Poppe believes could fuel significant growth in the long run.
Van de Poppe identifies a crucial support range between $5.67 and $6.11 for DOT. If the price can hold within this zone (highlighted in green), it could signal a potential reversal. He also highlights two resistance levels DOT needs to overcome for a bullish breakout: $9.30 and a more formidable barrier near $17.00. These resistance zones are marked on the chart.
Also Read: Polkadot Price Prediction: Is A Bullish Breakout Imminent Despite Market Downturn?
Another positive indicator is the Relative Strength Index (RSI), which suggests DOT is not yet overbought. This, combined with declining trading volume, could signal a market preparing for a significant move.
Van de Poppe’s analysis suggests that investors who believe in the long-term potential of Polkadot’s ecosystem and the RWA trend might consider accumulating DOT at current support levels. While the short-term outlook is uncertain, a breakout driven by these factors could lead to substantial gains for DOT.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
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