DOT Price Drops Below $6.2, Can It Reclaim Pre-FTX Level?

DOT Price Drops Below $6.2, Can It Reclaim Pre-FTX Level?

• Polkadot’s [DOT] price dropped after Bitcoin [BTC] broke below the $23.5K level. At press time, DOT was trading at $6.225, over 4% down in the past 24 hours.
• DOT’s drop hit a critical support zone of $6.013 – $6.200 which could act as an inflection point if demand increases at the level.
• The On Balance Volume (OBV) increased steadily, showing an uptick in trading volume and buying pressure which could boost DOT’s potential uptrend momentum.

Polkadot’s [DOT] price has been in the red over the past 24 hours after Bitcoin [BTC] broke below the $23.5K level. At press time, DOT was trading at $6.225, over 4% down from its opening price. Similarly, BTC was closer to retesting or breaking below the $23K level. Despite the drop, DOT has hit a critical support zone of $6.013 – $6.200 which could act as an inflection point if demand increases at the level.

The January rally of DOT was slowed by two phases of price consolidation, with the second phase being the most challenging as it broke below the uptrend line at press time. But the drop hit a critical support zone of $6.013 – $6.200. This zone was a resistance level before it was flipped into the current support level. If demand for DOT increases at this level, DOT could witness a price inflection and reverse the losses from the sharp drop. Such an upswing could move DOT above the uptrend line to retest the overhead resistance level of $6.804. In addition, if BTC reclaims the $23.5K level and surges afterward, DOT could reclaim its pre-FTX level of $7.124.

The On Balance Volume (OBV) which indicates buying and selling pressure increased steadily, showing an uptick in trading volume and buying pressure which could boost DOT’s potential uptrend momentum. However, the RSI was 50, showing a neutral structure; thus, the price direction wasn’t definitive. The above bullish bias was capped by the fact that the $6.0 – $6.2 support zone held steady.

Overall, the recent price action of DOT shows that it could be ready to climb higher if the market sentiment turns bullish. However, in order for this to happen, the $6.0 – $6.2 support zone must hold steady. If it does, DOT could witness a price inflection and retest its pre-FTX level of $7.124.