Polkadot’s native cryptocurrency DOT registered a 5-day restoration after kicking off April on the again of a robust bearish pullback. Nonetheless, its value motion, at press time, was approaching a beforehand examined resistance zone underpinned by a Fibonacci retracement.
DOT bears not too long ago went on a recess after bottoming out at $16.73 on 11 April, earlier than embarking on an general bullish efficiency. In actual fact, it’s up by roughly 10% since Monday, buying and selling at $18.37 on the time of writing.
Nonetheless, that restoration could be minimize quick by sturdy resistance close to the $18.73-price stage.
The 0.5 Fibonacci retracement line falls straight on the upcoming $18.73-resistance stage. The likelihood of DOT encountering resistance at that stage will likely be nice because of earlier help and resistance retests during the last 3 months.
If expectations holds true, then there could be one other potential pullback. Such an final result would additionally seemingly result in help close to the 0.618 Fibonacci stage, a stage which coincides with the $17.64-price stage. Evaluating its newest efficiency may additionally assist us decide the place the value is heading.
What can on-chain metrics inform us?
DOT’s newest pullback didn’t have sufficient momentum to drag it to its sub-$16 lows. Its on-chain quantity appeared to spotlight a hike from 10 April, a day earlier than the cryptocurrency commenced its newest rally. It was adopted by an uptick within the provide held by whales from round 51.87% to 52.04%.
This coincided with the hike in quantity and shopping for strain, ensuing within the uptick over the previous couple of days.
DOT’s on-chain quantity metric exhibits decreased quantity after the 11-12 April quantity improve. Though it has tapered down, it’s nonetheless above the current low and would possibly help the retracement on the upcoming Fibonacci stage. A slight drop in share held by whales backs the expectation. In actual fact, it’s nonetheless notably larger than it was previous to final week’s value uptick.
The availability held by whales and quantity metrics align with the likelihood of a pullback as a result of they point out decreased shopping for strain. Nonetheless, the truth that they haven’t dipped to their March lows means that the value won’t drop to these ranges within the short-term.