DOT price surged closer to $8.00 before slowing down, but will likely increase if bulls hold above $7.00
The price of Polkadot (DOT) has surged by more than 12% in the past 24 hours amid positive sentiment around the cross-chain protocol. Data on CoinMarketCap also shows that DOT is up by more than 45% in the past week, currently trading at $7.22 at the time of writing.
The upsurge for Polkadot follows two major fundamental developments, all related to a top cryptocurrency exchange and trading platform—Binance. It is the optimism resulting from the twin announcements by Binance that has catalysed the upward action and has prompted the bulls to eye the coveted $10.00 level.
Last week, Binance announced that it had set aside a $10 million fund aimed at supporting projects built on Polkadot. According to a blog post detailing the funding, the main objective is to enhance access to decentralised finance (DeFi) for Binance users.
Reaction to the news saw DOT surge by 8.29% on Binance, from $4.71 to $5.12.
The token’s price then soared 28% to see highs of $6.58 on 28 December after Binance moved to replace the ETH/BUSD pair on its homepage with DOT/BUSD. On the next day, Polkadot price jumped another 14% as bulls rallied towards $8.00.
The DOT/BUSD pair also gained, surging by comparative margins to that posted against the US dollar.
DOT/USD price outlook
Rejection at the recent highs saw the token’s price drop to current levels around $7.22. As can be seen in the charts below, DOT/USD is facing downward pressure and might drop below $7.20.
If that happens, the 61.8% Fibonacci retracement level of the upswing from $5.00 low to $7.82 high presents a cushion at $6.76. The 23.6% Fib retracement level ($5.67) and the 50-EMA ($5.12) offers alternate support zones.
DOT/USD daily chart. Source: TradingView
On the upside, if bulls succeed in breaking above the 76.8% Fibonacci ($7.23), a decent upside could see them retest the supply zone around $7.80. Managing to breach the next barrier at $8.00 on a positive sentiment could then put DOT on course for action near $10.00.
On the 1-hour chart, Polkadot price presents with a sell signal as suggested by the TD Sequential indicator. The pressure has seen bears attempt to push below $7.00, which could result in an 11% drop to $6.34. As long as prices remain above the 100-SMA and the RSI buoyant above 50, bulls will hold the upper hand.
DOT/USD hourly chart. Source: TradingView