Polkadot (DOT) Bulls Eye $5 Mark After a Three-Day Recovery Streak

Polkadot (DOT) saw a remarkable pullback and reverted the gains from the 52-week low mark this week. The DOT token traded in a significant downtrend and was corrected by 40% in the last two months.

Cryptocurrency market has observed a mixed outlook in the last 24 hours, with some tokens showing gains and others facing losses. The global crypto market cap has seen a slight decrease.

The top gainer in the last 24 hours is Polkadot (DOT), which saw a 2.36% rise and traded at $4.72 at press time. It showed a neutrality on the charts and has a monthly return ratio of -1.90% and 1.20% yearly, indicating long consolidation.

DOT price has been trading under the bearish influence and is capped inside a falling channel, delivering the lower low swings. Looking at the price action, the sellers continued to dominate and persist in putting pressure on the bulls.

Could DOT Price Stretch a Recovery?

The daily chart of the Polkadot token has shown a bullish overturn from the recent correction. The bulls were eyeing to stretch the recovery toward the $5 mark. Aiming to retain the gains, a significant short-covering move was noted on the chart.

Until the token crosses the $7 mark, it may continue to drive bearish movements and be capped inside a significant range. Above the $7 mark, the token can pave the gains and trigger an upmove ahead.

The RSI curve saw a rebound from the oversold region and suggested a potential reversal might be on the horizon. It might lift the price further.

Cryptocurrency trader @AMCryptoAlex highlighted in his tweet that DOT had almost reached a 1-year low. The last time the token was this low, it pumped 200% in 6 months.

“Almost 1yr low for $DOT

The last time DOT was this low, it pumped 200% in 6 months

Will it happen again?”

The recent bearish market sentiments and the fear among the long traders are causing the correction in DOT price. Still, the classic on-chain metrics highlighted a negative move and conveyed the bearish stance.

Social Metrics Saw a Downtick

Despite the price upmove, the social dominance curve saw a significant downtick. It implied a drop in online discussions and lower media buzz among investors.

Since July, the Weighted funding rate has observed a consistent negative flow, as its value has remained below the zero line. That means that the investors did not look confident in accumulating the price. Hence, a significant price correction occurred in the past sessions.

Funding Rate Witnessed a Sharp Negative Move

This week, a sharp decline in the funding rate occurred, which means a bearish sentiment. It signifies that sellers have to pay significant fees to buyers.

The token’s funding rate was at -0.0268% at press time, noting a severe bearish stance. It signified that the token has a lesser demand than the supply, which might impact the token’s price ahead.

Futures Open Interest Outlook

Amidst the intraday price rise, Futures Open Interest (OI) data noted flat long and short additions. It means that investors were in a dilemma, waiting for a clear directional move.

So, if the bulls maintain the bullish momentum, the token may reach $5.00 and then the $5.70 mark.

On the contrary, if the token fails to sustain gains around the $4.30 mark, it may breach the $4 mark. It can dive toward the low of the $3.20 mark ahead.

When writing, the short-term trend was weak and favored the sell-on-bounce structure. The sellers grabbed their grip around the $7 mark, and buyers continued to face rejection from that level.

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