- DOT bulls might get another chance for a comeback as the price flashes pivot potential in Fibonacci zone
- It may be worth evaluating on-chain stats for more directional clarity in the spot and derivatives segment
Polkadot’s native coin DOT has been declining since earlier this month – An indication of intense profit-taking after the gains it achieved in November. However, the cryptocurrency could soon resume some degree of bullish demand.
In fact, DOT was mostly bearish earlier this week, dipping to as low as $7.16 at the time of writing. This performance was noteworthy because it demonstrated clear support after this latest dip. The cryptocurrency’s price entered into the 0.5 and 0.618 Fibonacci range, where it looked likely to pivot.
Source: TradingView
At press time, DOT had already demonstrated signs of sell pressure cooling down in the last 24 hours, as well as some accumulation.
Contrasting DOT prospects with on-chain data
The latest observation could mark the end of the recent retracement and potentially, signal a demand resurgence. On-chain data suggested a shift, one underpinning that such an outcome had already taken place.
For example – Spot flows have been negative since mid-December, but recently switched back to positive in the last 24 hours. DOT had roughly $2.01 million spot inflows on Thursday morning.
Source: Coinglass
The shift in spot flows confirmed that investors anticipated a re-entry within the aforementioned Fibonacci zone. This outcome confirmed that DOT could still see robust demand, despite the recent downside.
This, amid recent concerns that DOT would be heading for more downside. Spot outflows and the market reaction to the Fibonacci zone retest were not the only signs though. The derivatives segment also demonstrated signs of a sentiment shift.
DOT longs vs shorts also registered a significant shift. According to Coinglass, roughly 93.35% of all DOT/USD perpetual addresses on Binance were long. However, the overall longs vs shorts ratio cross multiple exchanges remained in favor of the downside. Nevertheless, longs improved slightly over the last 3 days.
Could DOT still extend its downside? This was also a possibility, at the time of writing. DOT funding rates have been growing for the last 4 days. This was a reflection of the fact that there were more longs vs shorts.
Source: Coinglass
Finally, it is also worth noting that part of DOT’s mid-week dip was in tandem with the larger market’s performance. Especially after the crypto market reacted negatively to the latest FED meeting.
Traders may see this latest dip as a chance to accumulate dips below $8. DOT may deliver another 52% rally from its press time level to the next resistance range, if demand makes a strong comeback.
