While the cryptocurrency market in general has positively surprised investors recently, the same cannot be said for Polkadot (DOT).
Even with BTC, Solana, ETH and other cryptocurrencies up more than 20%, the Polkadot price has been in a steady downtrend since November 2021 and has shown no signs of recovery.
But that’s a thing of the past, according to analyst Akash Girimath:
“Now, however, there are glimmers of hope for investors as the DOT approaches a stable support level,” he said.
Polkadot targets 25% rise
He pointed out that Polkadot’s price is down 74% from its all-time high. It is currently hovering above a three-day demand zone, extending from $10.37 to $15.66.
As the analyst pointed out, the recent drop appears to be due to the presence of the 50-day Simple Moving Average (SMA).
“Since December 27, 2021, every small uptrend in Polkadot price has faced rejection at the hands of the 50-day SMA. The most recent rally reversed after approaching the same obstacle on March 1. The resulting pullback will likely lead DOT to retest said demand zone,” he said.
Furthermore, the analyst points out that interested investors can open a long position at $15.66 and look to re-cover the 50-day SMA at $19.75.
“Traders should note that in some cases, DOT can extend this leg to retest $20. In a highly bullish case, DOT can even run a run at the $22.23 resistance barrier, pushing the overall high. from 25% to 41%”, he said.
However, he highlighted that a daily candlestick below $10.37 will break out of the three-day demand zone and create a lower low. Such a move will invalidate the optimistic thesis and pave the way for bears to reign supreme.
“In such a situation, the Polkadot price could drop and retest the $10.09 support level or the $8.31 barrier, from where buyers can attempt a new rally.”