What’s next for Polkadot when the bears reappear?

In the past week, Polkadot shot up 16%, pushing DOT at $21.15 at the time of writing. The bullish momentum helped the coin trade above the USD 20 support level. In the past 24 hours, DOT lost 2% of its market value. The coin has fluctuated between $22.62 and $21 at the time of printing.

Polkadot had been trying to break the USD 22.62 resistance for quite some time in recent days. The bulls were rejected each time because the aforementioned price ceiling has worked as robust. Although DOT flashed trading sideways, the bulls managed to keep prices above the 20-SMA line for the past few days. At the time of going to press, however, it could be seen that the bears were back as prices plunged below the 20-SMA mark.

Price Analysis: DOT/USD four hours

Image Source: TradingView DOT/USD

The price of DOT was seen below the 20-SMA line, which meant that the price momentum of the coin was dragged by sellers. The closest support region for DOT was $20.91 to $19.65. Polkadot’s trendline has been on the upside for the past few days as the coin has continued to rise over the said time frame.

For a long time, Polkadot traded significantly at the $22 price, but its attempt to break above that price level was dampened by the bears. The coin failed to trade above the crucial resistance mark, as one reason the DOT fell in value at press time. Continued side trading will push prices further down from current levels.

The technical outlook also picked up on the bearish price action and flashed bearish at the time of writing. The Relative Strength Index had managed to hold out over half the line as long as the bulls were close to $22, the moment the coin lost momentum, RSI fell through the zero line. A drop below the zero line signaled a sell and sellers were seen catching up with buyers in the market.

MACD was also negative as the indicator underwent a bearish crossover. Red histograms were seen below the half-line, consistent with the same reading, RSI showed a higher number of sellers. MACD had displayed a sell signal for DOT.

Related literature | Ethereum beats Walmart, Mastercard as 25th largest asset in the world

DOT . Next Trading Levels

Continued seller resistance would push the coin towards USD 20.91 and then towards USD 19.65. DOT’s volume closed in the red in the past two trading sessions. Red volume bars are indicative of bearish price movements, meaning most exchanges were made via sell.

In the event that bulls resurface, which could happen if prices regained the $22 mark, there could be a positive price breakout. An upward break would propel prices towards the next $25 price cap, but during the trading sessions, DOT would continue to move on the downside and then try to reach the aforementioned resistance mark if the $22 mark again proves not to be a stiff price cap for the coin.

Related literature | Cardano (ADA) Price Hits $1.20, Aims to Recoup Past Losses

Leave a Reply

Your email address will not be published.