Polkadot (DOT) price falling below the $5.23 support level on the 12-hour price chart ended a week-long volatile formation. However, the selling pressure slowed down and it seemed to provide a good chance for bulls to recover by stabilizing the price at the psychological level of $5.
While the DOT price was experiencing a decline, it was seen shining in the social sphere of the cryptocurrency. This was highlighted with a metric report on the increasing social interactions of the network. As social awareness continues to increase, it may also have an impact on the price of DOT.
After sellers reached the $5.23 price level on August 1st, buyers quickly attempted a recovery and made a counter move. However, the price faced rejection at a new resistance level. Thus, this led to a 5% price drop in the last 48 hours. On the other hand, the slowdown of the downward momentum in the $5 price range may also provide an opportunity for bulls to reverse the downward trend.
The Relative Strength Index (RSI) slightly rose to 39, indicating a sign of renewed confidence. The Chaikin Money Flow (CMF) also climbed above the zero line with a reading of +0.06 to indicate capital inflows.
A reversal from current levels may require a close above the $5.23 price level to sustain continuous gains. Another price rejection at this level may indicate that DOT has experienced long-term losses and is moving towards the $4.4 to $4.6 price range. At the time of writing, Polkadot (DOT) is trading at $4.95.
Although DOT may present an opportunity for an upward recovery, there has been very little or no reaction in the futures market. Short positions continue to dominate the long/short ratio, accounting for 52.1% of open positions.
Therefore, investors may continue to be cautious when opening new positions to avoid getting caught in an upward recovery or prolongation of the current price decline.