thenewscrypto.com
- Polkadot (DOT) recently broke out of a consolidation range, sparking optimism for a trend reversal after a 19% dip in January.
- DOT found support around $6.79–$6.72 and is now near $7.50, but faces resistance at this level.
- Bullish indicators like RSI are rising, but DOT needs to surpass $8–$8.14 for a sustainable reversal.
Polkadot (DOT) price busted out of a lengthy consolidation range this week, sparking optimism for a sustained trend reversal following weeks of listless action. The breakout comes on the heels of a choppy January that generated 19% dip, even amid similar base-building across crypto markets.
After sliding 12%, DOT discovered support confluence between $6.79 and $6.72 toward the end of the month. The token then fluctuated in an increasingly tight band until bulls registered enough power for an upside resolution.
The breakout now leaves DOT pushing near the upper threshold of its recent equilibrium around the $7.50 mark. Moving above there requires taking out several layers of potential resistance, given the multiple rejections in that area this month alone.
DOT breaks out but faces additional resistance
Bullish momentum indicators like the relative strength index (RSI) have turned higher but thus far failed to gather overwhelming traction. That means DOT remains vulnerable to bull traps and whipsaws as it challenges stubborn selling pressure.
To confirm upside conviction and durably reverse its multiweek slide, Polkadot ultimately needs acceptance above the $8–$8.14 zone that has consistently thwarted additional advances. From there, the door reopens toward retesting 2022 highs.
For now, analysts recommend exercising patience, given just how swiftly positive price action has reversed since 2023 began amid a still-tepid risk appetite. DOT also faces threats from deteriorating network growth and usage metrics that could hamper its blockchain’s long-term adoption.
Overall, traders should view the recent range breakout as constructive but requiring further validation before going all-in on continuation potential. Crypto sentiment pivots swiftly, and DOT bulls face work reclaiming lost ground.