Polkadot (DOT) surged 30% in two weeks, reclaiming a critical support level lost during the recent tariff war. The strong recovery is a reflection of renewed optimism in the market. Since investor sentiment has turned bullish, the market players now anticipate the rally to continue in the coming weeks.
This level has been the catalyst for strong reversals in the past. TradingView data confirms DOT has come back here six times since October 2023. Each instance sparked significant gains, fueling the current optimism surrounding the token’s potential.
Traders eye next breakout targets
The breakout of the downtrend channel that created in the first week of May has accelerated the rally. DOT has now taken out the 0.5 Fibonacci retracement level at $4.34. The market is now closely observing the next breakout points and awaiting a bigger uptrend if the momentum remains constant.
Momentum indicators flash mixed signals. RSI is at 73, significantly above the overbought line, indicating a short correction is likely. But MACD is bullish since the MACD line is expanding well above the signal line, a great sign of dominance by buying pressure.
Open Interest is at $483 million currently, indicating rising capital inflows in DOT. While bullish, this is also vulnerable to lead to a short correction. The first support lies at the 0.382 Fibonacci level at $4. A correction to this level would be favorable for sustained further action.
Polkadot eyes $5.44 if momentum returns
Momentum indicators are still bullish even with the elevated RSI. The bullish momentum is continuing with the growing MACD line that is above the signal line. If DOT is maintaining above a close at $4.34, it could move towards the next target at $5.44, which is an estimated 23% higher from here.
Above $5.44, DOT is within a low resistance area. Significant resistance levels further down the road are $6.50, $7.50, and $8. These levels are critical checkpoints before a possible retest of the $11.60 all-time high. Market sentiment and momentum will decide how soon those targets are tested.
