Polkadot made hay while the Bitcoin sun shined on the altcoin market. The para-chain operator’s native token, DOT, negated a bearish pattern on the chart through a 23% hike between 3-5 February. However, its progress was cut off at a supply zone and a period of sideways movement was expected going forward. While bulls had leverage above the 50-SMA (yellow), the bias could swiftly change if DOT weakens below $20.7.
Polkadot 4-hour time frame
Bitcoin’s reluctance to close above $45K came at an unfortunate time for Polkadot. The world’s 11th largest digital asset required an external catalyst to get past a supply zone between $22-$23.5.
A stalemate was now in effect, with DOT trading below the 200-SMA (green) but above the 50-SMA (yellow). The situation could likely dictate DOT’s near-term price, as sellers fend off buy momentum at the supply zone. Low market volatility was also evident through a constrained Bollinger Bands and a below-par Average Directional Index.
Meanwhile, investor sentiment was nothing extraordinary at the time of writing. Crypto Carbon Ratings Institute’s report on Polkadot and an $18 Million Pioneers Prize Program was received mildly by investors. Data from LunarCrush revealed that DOT’s social dominance spiked briefly yesterday, but dipped during later hours of trade. Its weekly social dominance was down by 26% at press time.
Until DOT discovers strength for an upwards move, bulls needed to maintain the price above the 50% Fibonacci level. A breakdown would pile massive pressure onto the daily 20-SMA (red) around $19.5, which was DOT’s last hope for a bullish rebound.
Should bulls sustain the near-term pressure, a close above $23.5 looked was a formality. The weekly target was set around $28.5, translating to a further 30% jump from DOT’s current level.
Conclusion
Investors can expect Polkadot to change hands between $23-$20.7 over the near term. Furthermore, chances of a rally would be significantly higher as long as DOT holds above $20.7