Here’s why Polkadot needs to break THIS level to reach $7

• DOT’s recent price action showed a strong rebound, but a confirmed trend shift required resistance near $5.60 and $6.20.
• Technical indicators, including RSI and Moving Averages, suggested a cautious bullish outlook as DOT seeks further upside momentum.

Polkadot [DOT] showed signs of recovery after a prolonged downtrend, surging nearly 8% in the last trading session. The price jumped from an opening value of $4.809 to close at $5.227, sparking hopes of a potential reversal.

However, key resistance and support levels determine whether DOT can sustain this momentum or face another pullback.

DOT’s technical setup: resistance and support levels

Polkadot’s recent surge has brought it closer to critical technical levels. The first chart indicated that the 50-day Moving Average (MA) was at $6.272, while the 200-day MA was at $5.646. 

MA acts as major resistance levels, and a successful breach above them would confirm a bullish trend. 

Additionally, the Ichimoku Cloud analysis suggests that DOT remained below the cloud, indicating it has yet to fully break out of bearish territory.

Source: TradingView

Meanwhile, at the time of writing, the Relative Strength Index (RSI) sat at 42.78, which was still below the neutral 50 mark. This suggests that while DOT is recovering, it is not yet in bullish territory.

If RSI crosses above 50, it would signal increasing bullish momentum.

Fibonacci and pivot point analysis

The second chart provides additional insights using Fibonacci retracement and pivot points. Polkadot was testing the S1 support level as of this writing, which was around $5.174.

If this level holds, a move toward the R1 resistance at $7.00 could follow. 

Source: TradingView

However, a rejection from this point could push DOT back to its S2 support at $4.50. A break below this level would invalidate the recovery narrative, putting DOT at risk of further downside.

What’s next for DOT?

For DOT to sustain its recent gains, it needs to break above $5.646 (200-day MA) and establish support above $6.272 (50-day MA). The RSI also needs to strengthen above 50 to confirm increasing buying momentum.

A strong close above these levels could pave the way for a move toward $7.00 and potentially higher levels. However, failure to hold above $5.174 could cause DOT to retest lower supports at $4.50 and possibly $4.00.

Traders should watch volume trends closely. An increase in volume would support a bullish breakout, while declining volume could indicate a weakening rally.

DOT’s recent 8% surge is promising for bulls, but must overcome key resistance levels to confirm a sustained recovery. If DOT maintains support above $5.174 and breaks past $6.272, it could move toward $7.00 and beyond.

However, failing to hold these levels could put the recent rally at risk, potentially leading to another downturn.