Polkadot [DOT] just concluded one of the crypto-market’s most volatile weeks with a retest of support near the $7-price level. This strong support has so far prevented DOT from seeking as much downside as most top cryptocurrencies.
DOT is among the top cryptocurrencies with the lowest weekly loss. It was trading at $7.18, at press time, after 5.71% gains in the last 24 hours, lowering its weekly loss to 6.71%. However, this is a minor drop compared to other top cryptos, some of which lost more than 20% in the last 7 days.
DOT’s price has been consolidating near the $7-price level for the last few days. This is within the same ball-park as its previous bottom during the May crash. This means that the same support line has been holding well with little pressure to push the price lower.
One potential reason why the support level seems so strong is because there has been a notable uptick in accumulation near the same level.
DOT’s RSI highlighted the lack of selling pressure within the support range. The same level also acted as an accumulation zone when the price fell into the oversold zone on Monday.
Limited by low buying pressure and yet…
DOT has only managed little upside so far due to prevailing market conditions. Although it seems to not have experienced significant selling pressure, it also failed to garner enough buying pressure to support strong upside.
Despite this, whales have been accumulating near the $7-support level, as indicated by the supply held by whales metric. It increased from 44.45% on 16 June to 44.91% by press time.
Source: Santiment
DOT’s price also registered a significant uptrend over the last two days, as well as a volume increase during the same time. This aligns with the accumulation near support.
However, bearish market conditions may have limited any potential upside because of the heightened FUD levels.
Conclusion
DOT’s strong support is a healthy sign of prevailing investor sentiment regarding its current price level. It may also provide a ramp on which the price may bounce from. However, this does not guarantee that the market will not experience more sell pressure in the next few days, potentially leading to more downside.
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