Polkadot slumps 18% – Here’s how DOT bulls can stage a recovery

January 20, 2024

By Akashnath S

Edited By: Ann Maria Shibu

DOT was trading at a key demand zone.

The Open Interest chart showed strong bearish sentiment in the past few days.

Polkadot [DOT] experienced a 20.5% fall in prices in the last eight days. On the 11th of January, DOT rose to $8.58 but fell to $6.82 on the 19th. Despite this, buyers could still drive a recovery.

Technical analysis showed that the market structure of DOT on the one-day chart was bullish. Moreover, prices have receded to a demand zone. This presented traders with an opportunity to go long.

The bullish order block was not invalidated yet

AMBCrypto’s analysis of the one-day price action showed a bullish market structure break on the 11th. Even though this move was almost entirely retraced, a key support zone remained valid.

Demarcated by the cyan box, the bullish order block extended from $6.82 to $7.32. These levels were the extremes of the 7th of January’s trading. At press time, DOT was at $6.895.

Source: DOT/USDT on TradingView

A daily session close below the $6.82 level would mean the bears have the upper hand. In this scenario, a drop to $5.56 would become much more likely.