The price of Polkadot has been falling since it peaked at $12 in March 2024. Despite the price drop, the network continues to build. Polkadot developers released a new update that will pave the way for the next wave of Polkadot 2.0 upgrades. This comes amid a very bullish crypto market following Wednesday’s Fed rate cut and the Bank of Japan keeping rates unchanged. Meanwhile, DOT price action shows signs of bottoming out. Is Polkadot about to bounce back?
Bulls vs. Traders: Who Will Drive Polkadot Price Higher?
A battle broke out between bulls and traders during the Agile Coretime release. Polkadot prices have been in the control of bears since the peak of the mini-bull run in March and are now down 67%.
Data from Santiment shows that DOT open interest (OI) has also been falling as prices have fallen, meaning that DOT open interest has been falling since March.
Traders exiting a particular market could hurt prices through growing negative market sentiment. Additionally, lower liquidity could make it more difficult for larger investors to enter or exit positions, affecting DOT prices.
Nonetheless, DOT investors are optimistic about potential buying from yearly lows as OI has surged in the past 24 hours. Moreover, the long-term trend outlook is bullish as DOT may have bottomed. Moreover, a massive bullish reversal pattern may be forming, which could push Polkadot price back to $55.
Polkadot Price Analysis: All Eyes on $55, Stop Loss at $10
Polkadot (DOT) recent price action shows that a bottom may be forming near $3.63. The price is currently trading near the major support between $3.63 and $4.36, which is a key area for the price to rebound in 2022 and early 2023.
Key support and resistance levels
$3.63 – $4.36: A key support area where the price is currently consolidating. This level has been historically strong and may hold again.
$6.70 – $9.65: The nearest resistance zone, which is consistent with the previous consolidation, is also the resistance level that Polkadot needs to break to rise further.
Price is approaching the lower Bollinger Band, indicating oversold conditions. Historically, this situation often leads to mean reversion, where price falls back to the middle or upper Bollinger Band, indicating rebound potential.
If the price manages to hold the support and rebound, the projected gain target of 123% could push DOT price towards $9.65, in line with the overhead resistance area.
Conversely, if the price drops to the $3.60 to $4.50 range, it would be a good time to buy. However, if the price drops further and the market sentiment changes, Floki could drop to $3.00.
