Polkadot price prediction – Here’s what’s next for DOT after its entry into THIS zone!

DOT bulls might get another chance for a comeback as the price flashes pivot potential in Fibonacci zone
It may be worth evaluating on-chain stats for more directional clarity in the spot and derivatives segment

As a seasoned analyst with years of experience navigating the ever-changing crypto market, I find myself intrigued by the recent performance of DOT. The Fibonacci zone retest and the shift in spot flows suggest that we might be on the cusp of a resurgence of bullish demand for this coin.

Over the past few weeks, there’s been a downward trend with Polkadot‘s native token DOT. This drop suggests that investors have been taking profits following the significant rise seen in November. Yet, it’s possible that DOT may pick up some buying interest again soon.

Indeed, DOT had a predominantly bearish trend earlier in the week, dropping as low as $7.16 at the point of writing this. This significant decline served as a notable demonstration of strong support following the recent dip. The digital currency’s value found itself within the 0.5 and 0.618 Fibonacci retracement levels, suggesting it was poised for a potential reversal.

Currently, there’s evidence that the selling pressure on DOT has been easing over the past day, and there are indications of some buying activity taking place too.

Contrasting DOT prospects with on-chain data

The most recent findings might indicate the conclusion of the current pullback and possibly hint at a renewed interest in demand. Data from on-chain indicates a change, implying that this situation may have already occurred.

Example – Since mid-December, spot flow has remained negative, but it has recently changed to positive within the past 24 hours. On Thursday morning, DOT experienced approximately $2.01 million in spot inflows.

The shift in spot flows confirmed that investors anticipated a re-entry within the aforementioned Fibonacci zone. This outcome confirmed that DOT could still see robust demand, despite the recent downside.

In my analysis, despite recent apprehensions about potential further declines in DOT, there were additional indicators that suggested as much. Not only did spot outflows and the market’s response to the Fibonacci zone retest provide telling signs, but the derivatives segment also showed clear evidence of a shift in sentiment.

There’s been a substantial change in the number of DOT holders who are long versus short positions, as reported by Coinglass. On Binance alone, about 93.35% of all DOT/USD perpetual accounts were holding long positions. However, when considering multiple exchanges, the overall ratio still favored a downtrend. Interestingly, over the last three days, the number of long positions has shown some improvement.

Is it possible that DOT’s decline could continue, given the recent trend? This was indeed a potential scenario when the previous report was written. The increasing funding rates for DOT over the past four days suggest that there are more long positions than short ones in the market.

To add, a portion of DOT’s midweek drop coincided with broader market movements. This was particularly noticeable following the crypto market’s unfavorable response to the most recent FED meeting.

Traders might view this recent drop as an opportunity to gather more assets at prices under $8 for DOT. If demand rebounds strongly, there’s potential for DOT to surge by approximately 52% from its current level, reaching the next resistance range.

2024-12-20 12:39

Contrasting DOT prospects with on-chain data

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