Polkadot's DOT token dropped below $1 this week, hitting levels traders consider extremely oversold. The plunge sent the Relative Strength Index (RSI) to 21—a reading that typically signals exhausted selling pressure. Smart money entities started accumulating DOT amid the slide, eyeing a potential bounce toward $1.30 within two weeks if the $0.88 support holds firm.
Oversold Threshold Reached
The RSI hitting 21 puts Polkadot in rare territory for the current market cycle. That number sits well below the 30 threshold where many traders consider an asset severely oversold. Historically, such low readings often precede short-term rebounds when buying interest emerges. But the metric alone won't fuel recovery—it needs to align with actual buying momentum.
Large Investors Step In
On-chain data shows substantial buying by large entities during the recent dip. These players, known for moving ahead of retail crowds, have increased their DOT holdings while prices tumbled. Their activity suggests confidence in a near-term turnaround, though the exact size of their positions remains unclear. This accumulation contrasts sharply with the broad sell-off that pushed prices down.
The $0.88 Make-or-Break Level
Everything now hinges on whether DOT holds above $0.88. Traders watching the chart say breaking that support would shatter the current reversal thesis. But if it stays intact, the path opens to a projected $1.30 target within two weeks. That 30% gain would mark a sharp turnaround from the current sub-$1 price.
Traders will check price action around the $0.88 level daily this week. A sustained break below it could erase the two-week recovery window entirely.
