Polkadot (DOT) recently experienced a significant pullback, erasing gains from its 52-week low. Over the past two months, the DOT token has seen a correction of 40%. Despite a three-day recovery streak, the price of DOT dropped below its major demand zone of $5.
Currently, the DOT token is trading at $4.72, showing neutral sentiment on the charts. The monthly return ratio stands at -1.90% and the yearly return ratio at 1.20%, indicating a period of consolidation.
Polkadot’s DOT is currently trapped within a falling channel, with sellers maintaining dominance over buyers. However, there are signs of a potential bullish turnaround. The daily chart shows a bullish reversal from the recent correction, with the possibility of a recovery towards the $5 mark. Additionally, the RSI curve suggests a potential reversal, lifting the price further.
Despite the recent price correction, on-chain metrics indicate a negative move and a bearish stance. Social metrics also show a downtick, suggesting a decrease in online discussions and investor interest. Furthermore, the funding rate has experienced a sharp decline, highlighting a bearish sentiment.
Looking at futures open interest data, long and short additions remain flat, indicating investor indecision and the need for a clear directional move.
If bullish momentum is maintained, the DOT token could potentially reach $5.00 and then $5.70. However, failing to sustain gains around $4.30 may lead to further decline towards $4 and potentially even $3.20.
Currently, the short-term trend favors a sell-on-bounce structure. Sellers have been active around the $7 mark, while buyers face continuous rejection at that level.