DOT has just stepped into a crucial Fibonacci zone, which could signal a significant rebound in price. This area is often associated with renewed demand, and many investors are keenly watching for signs of movement.
After facing a steep decline earlier this month, driven largely by profit-taking from its impressive gains in November, DOT could be on the verge of a comeback. At a recent low of $7.16, the coin’s performance revealed observable support, making its entry into the 0.5 and 0.618 Fibonacci range particularly noteworthy.
Over the last 24 hours, signs have emerged indicating that the sell pressure on DOT is easing, alongside hints of accumulation among traders. Such activity could mark the end of the recent downturn and hint at a revival in demand.
When we examine the on-chain data, a pattern starts to emerge. Although spot flows had been negative since mid-December, a shift occurred recently, with approximately $2.01 million in spot inflows noted just yesterday. This uptick suggests that investors foresee a renewed interest in DOT, especially as it reclaims its position within the defining Fibonacci zone.
Despite concerns surrounding potential further decline, it’s important to remember that this sentiment shift isn’t limited to on-chain metrics. In fact, the derivatives market also shows promise, with a significant majority of traders leaning towards long positions. Specifically, 93.35% of all DOT/USD perpetual addresses on Binance were long, although the overall long-to-short ratio across various exchanges still tilted towards bearishness.
There is still a lingering question: Could DOT see further declines? The current situation could indicate a possibility of that happening, especially as funding rates for DOT have increased over the past four days. This reflects a greater number of traders going long compared to those shorting the asset.
Part of the recent dip can also be attributed to the overall performance of the cryptocurrency market, especially following reactions to the latest FED meeting. For many traders, this mid-week dip presents an opportunity to buy in under $8. Should demand make a significant comeback, DOT might even rally by as much as 52%, landing in the next resistance range.
With renewed attention on DOT, it’s clear that many are eager to see how this developing story unfolds. Keep an eye on those Fibonacci levels—it could just be the key to DOT’s next chapter!
