Polkadot exhibited bearish engulfing candlestick; Suggests Further Downtrend

Polkadot has fallen sharply over the past week as the broader market ramped up losses at the time of writing.

Bitcoin nosedived to $28,000 and presented a loss of 7% from the last 24 hours. All major altcoins have followed the same path of registering losses on the daily chart.

Polkadot was trading in a bearish trendline, though, DOT tried to recover from charts. The recovery could be blocked if buyers fail to return to the market.

The price of the altcoin was trading near its immediate support of $8.04.

DOT last traded around this price in July 2021. In the past four months, Polkadot has seen rangebound rallies.

The price of DOT has been wedged between $24 and $16 in the past 17 weeks. Although Polkadot has staged a revival, it is too early to conclude whether the currency will continue to move north.

Polkadot Price Analysis: One Day Chart

Polkadot was priced at $10.64 on the one day chart | Source: DOTUSD on TradingView

Polkadot was trading at $10.64 at the time of writing. In the past 24 hours, DOT has lost more than 12% and in the past week, the coin has lost nearly 30% of its market value.

A bearish trendline indicates bearishness, although the coin attempted to rise above the immediate resistance line of $10.80.

Moving above the $10.80 price level, the coin could target $13.22. To the bearish dissertation, the currency has to trade above the $14 price to expire.

The coin has seen a series of bearish engulfed candlesticks (green arrow) on the one-day chart.

The bearish engulfed candlesticks mark the beginning of bearish price action and its continuation.

In the event of a price reversal, if the coin manages to stay above the $13.22 price level, the other two resistances for DOT will be at $16.06 and $17.46 respectively.

The currency’s traded volume was seen in green. This meant that the coin was showing a change in price direction.

Technical analysis

Polkadot registered a drop in buying pressure on the one day chart | Source: DOTUSD on TradingView

Polkadot had been oversold for the past few days, but the coin started to register an increase in purchasing power.

The Relative Strength Index posted an uptick on the one day chart. The RSI moved above the oversold zone as buyers started to enter the market.

Buying pressure has remained low in the market as the price of the currency is still driven by sellers in the market despite the uptick. The Directional Movement Index gives the price momentum in the market.

DMI was negative on the chart as the -DI was above the +DI line signaling bearish price action.

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Polkadot indicated bearish price action on the one day chart | Source: DOTUSD on TradingView

Polkadot tried to recover from its chart because the indicators have shown that price action. Chaikin Money Flow portrays capital outflows and inflows.

On the one day chart, Chaikin Money Flow was seen registering an uptick pointing towards increasing capital inflows over outflows.

Awesome Oscillator means price dynamics of the market. The AK continued to red histograms below the half-line leaving Polkadot still blinking in a negative price direction.

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