Polkadot (DOT) price is one of the altcoins to post the largest gains since the market turned bullish around October 18, recording significant gains as traders and investors shelved their desire to take profits. However, now things could get worse as the price faces a formidable supply bottleneck.
Polkadot price has increased 80% since October 18, but now faces a supply zone stretching from $7.23 to $7.57.
To confirm the continuation of the medium-term trend, the price must close the daily candle above the middle line of this order block of $7.42.
The relative strength index (RSI) shows that DOT is massively overbought, at 83, but its trajectory or direction to the north suggests continued buying momentum. Similarly, the histogram bars of Awesome Oscillator (AO) remain in the positive zone with a large green volume bar, reinforcing the bulls' presence in the DOT market.
Increased buying pressure could see Polkadot price break above the $7.42 barrier, turning the supply zone into an uptrend breaker by retesting the $7.90 high.
Notably, this level was last tested on February 19. Such a move would constitute a 7% increase from current levels.
On the other hand, if the supply barrier holds as a block of resistance, Polkadot price could face rejection, a 5% drop to the psychological level of $7 or worse, a retracement to the most important Fibonacci level, 61.8 %, at $6.20. In extreme cases, the decline could extend to the 50% Fibonacci retracement level at $5.73. Such a move would constitute a 20% correction.
