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Polkadot (DOT) recovered superbly from a critical support level to maintain its bullish stance. The 14% price increase from the $6.6 support level over the past day was vital for DOT, as buyers looked to break the local resistance of $7.7.
In the meantime, Bitcoin (BTC) continued to lead the way for the crypto market with the kingcoin hitting the $44k mark.
Price rally could boost buyers' efforts to break selling pressure at key price level
The bearish resistance at $7.7 has stood in the way of the bullish push for more gains over two weeks. A double price rejection at the level has kept DOT in a mini-range with $6.6 acting as the range low and $7.7 acting as the range high.
Despite the price rejections, buyers remained firmly bullish with DOT currently trading at $7.5. The last three candles on the four-hour timeframe were strongly bullish and could see buyers succeed in flipping the resistance level on the third attempt.
Along with the bullish price action, the on-chart indicators highlighted the massive buying pressure. The Relative Strength Index (RSI) which measures the trend strength stood at 70 which signaled massive buying pressure. Likewise, the Chaikin Money Flow (CMF) spotlighted the big capital inflows with a reading of +0.27.
A combination of these datasets showed that DOT buyers were in the majority for the short term. If bulls can successfully close above the $7.7 resistance level on the four-hour timeframe and register a daily bullish candle close, buyers can target profit levels at $8.5 for the short term and $10 for the medium to long term.
On the flipside, another rejection at $7.7 could offer bears a shorting opportunity to $7 with a single-digit profit target.
Looking at Polkadot’s on-chain data, the first-ever annual report showed that the Polkadot chain and parachains recorded over 100 million fee-paying transactions in 2023. This translated to over 9 million transactions/month on average.
With the crypto market experiencing a resurgence, this could bode well for Polkadot and spur more growth for DOT, its native token.
Disclaimer: This article does not constitute trading, investment, financial, or other types of advice. It is solely the writer’s opinion. Please conduct your due diligence before making any trading or investment decisions.