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Polkadot [DOT] enters critical support level, should investors bet on it

DOT continues to be bleeding because the bear market extends for one more week, with no signal of slowing down. This has particularly been the case within the final two days throughout which promoting volumes elevated after failing to bounce again.

Now the cryptocurrency is closing in on one more assist and resistance degree close to $7, however the query is- Will it reverse or preserve its bearish trajectory?

DOT traded at $8.11 on the time of this press, following a slight restoration inside the previous couple of hours after dipping as little as $7.30. Zooming out reveals that the $7 value degree has traditionally acted as a assist and resistance zone. There’s a important chance that DOT could obtain some upside if the $7 value degree gives ample assist.

DOTUSDT 2022 05 12 15 30 17

Supply: TradingView

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There are quite a few causes for the expectation of a bounceback from assist. The value is already deep within the oversold zone as indicated by the RSI. The MFI has to this point registered heavy outflows that coincide with the present value degree. The slight bullish restoration after coming into the assist zone means that there was some accumulation however this has not registered within the MFI.

A few of DOT’s on-chain metrics are at present in favor of bullish restoration. For instance, provide held by whales registered a slight uptick within the final 24 hours, suggesting that whales are shopping for at low costs. The identical metric registered important outflows from whale addresses within the final 4 weeks.

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Polkadot DOT 16.37.13 12 May 2022

Supply: Santiment

The Binance derivatives funding price plummeted between 9 Could and 11 Could, reflecting lowered curiosity within the derivatives market.  Nonetheless, the uptick within the final 24 hours means that the derivatives market is taking over an curiosity in DOT on the cheaper price ranges.

Is there a threat of extra draw back?

The shortage of a major uptick within the MFI and RSI regardless of being deeply oversold displays the dearth of sufficient shopping for stress. That is because of the low investor confidence because the market struggles to shake off the FUD. In consequence, the bears have maintained a stronghold on DOT’s value motion.

The relentless sell-off that has prevailed in the previous couple of days should still proceed, properly into the weekend. If that would be the consequence, then there’s a important chance that DOT will drop to $5 or decrease.

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