Polkadot token price is once again facing demand pressure at the multi-year support level of $3.6 amidst the backdrop of oversold indicators and on-chain growth.
Polkadot price fell 2% in the past 24 hours as the cryptocurrency market saw renewed selling momentum during Wednesday’s U.S. trading session. Leading cryptocurrencies Bitcoin and Ethereum also fell 2-4% to $54,700 and $2,351, respectively. Supply pressures suggest that the current correction has not yet bottomed and sellers may drive prices to continue falling.
Polkadot Price Signals Reversal from Major Support Level
The cryptocurrency market has seen a notable correction over the past two weeks amid recent recession fears and a sharp sell-off in traditional markets. The selling pressure caused most major cryptocurrencies, including Polkadot (DOT), to fall sharply.
On the daily chart, the price of Polkadot fell from $6.47 to $3.6, a drop of 44.55%. The above support level has remained intact since October 2020, and the bottom is the last pullback trend before the 233% rally.
The long-tailed rejection candle highlights the continued demand pressure at the $3.6 support level, pushing the altcoin up 26% to $4.5. As a result, Polkadot’s market cap surged to $6.68 billion.
Moreover, the Relative Strength Index (RSI) indicator is at 29%, suggesting that this DOT token is in the oversold zone. Such a discount will attract more traders and could drive a 16% rally to $5.3 to challenge the downtrend line.
On-chain data from The Block shows that Polkadot’s network growth activity has clearly resumed. The number of unique addresses on the Polkadot relay chain (7-day moving average) increased from 956 to 1,100 in a week, an increase of about 15%.
Additionally, the number of active addresses on the Polkadot relay chain (7-day moving average) surged from 5,630 to 7,030, an increase of approximately 25%.
These increases indicate stronger user engagement, growing network activity, and potentially higher adoption and utilization of the Polkadot ecosystem.
Conversely, broader market selling pressure remains in place, which could strengthen sellers to re-challenge the $3.6 bottom. A break below this level would signal a continuation of the downtrend and could cause Polkadot’s price to plunge 18% towards the psychological support level of $3.
