Polkadot (DOT) has dropped by almost 11% during the past week. Bearish sentiment continues to weigh down on the asset, and DOT is increasingly under greater scrutiny as investors assess their options.
Despite DOT’s price declining considerably since March, on-chain metrics are positive, with daily active users registering an increase and on-chain volume at record levels. One analyst has even predicted a 2x surge should DOT break out of its current falling trend.
Polkadot (DOT) Price Plummets
Polkadot (DOT) has continued to drop, spending the entire week in the red and losing a key support level. After falling to $5.72 on Sunday, DOT attempted to move above $6 on Monday, rising to a day high of $5.88. However, momentum stalled, allowing sellers to retake control. As a result, DOT fell back by 1.05% and settled at $5.66. The price continued to decline on Tuesday, falling by 2.30%, and then slipped below $5.50 on Wednesday to end the day at $5.39. Selling pressure intensified on Thursday as DOT dropped to a day low of $5.03. However, the price rebounded, indicating strong demand around the $5 price level. DOT eventually settled at $5.34 after a decline of 0.93%.
Source: TradingView
The current session sees DOT at $5,26, down 1.50% since yesterday, as sellers look to drive the price lower. So, where does DOT go from here? DOT’s rebound from $5 on Thursday could give an indication. Should DOT drop to $5, we could see the price rebound. However, demand must pick up at higher levels for DOT to break the stubborn level at $6. For a push to $6, bulls must defend $5 and push DOT back above $5.50. If the price can rebound from this level, we could see DOT test $6.
On-Chain Metrics Remain Robust
Despite selling pressure weighing DOT down, on-chain activity on the network remains strong, with daily holders at 1.3 million. Data from Polkadot Subscan shows a 19.21% increase in daily active users. While open interest is low, the long/short ratio is at 2.83, which indicates a majority of traders are betting on a price increase, and while the market is extremely cautious, it is not ruling out a rebound in the future.
One analyst is quite hopeful about the future prospects of DOT, noting that the price is currently in a falling wedge pattern, which often signals a potential price increase. The analyst suggested it could be a good time to buy DOT before a potential 2x breakout.
“$DOT is Consolidating within a falling Wedge Pattern. Accumulate it for the midterm before it’s too late. Expecting 2x Bullish rally after the Wedge breakout.”
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
