DOT Price (Polkadot) Approaches Key Level: Should Traders Brace for Sharp Drop?

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Polkadot (DOT) is showing bearish signs below the $8 resistance against the US Dollar. The price could extend its decline if it fails to stay above $6.00.

  • DOT is gaining pace below the $8.80 and $8.00 levels against the US Dollar.
  • The price is trading below the $7.20 zone and the 100 simple moving average (4 hours).
  • There is a key bearish trend line forming with resistance at $6.50 on the 4-hour chart of the DOT/USD pair (data source from Kraken).
  • The pair could continue to decline toward the $5.00 support zone.

Polkadot Price Resumes Drop

After a steady increase, DOT price faced resistance near the $7.60 zone. It formed a short-term top and started a fresh decline below the $7.00 level, like Ethereum and Bitcoin.

There was a move below the $6.20 support zone. A low was formed near $6.03 and the price is now consolidating losses. It is slowly moving higher above the $6.35 level and the 23.6% Fib retracement level of the downward move from the $7.58 swing high to the $6.03 low.

DOT is now trading below the $7.00 zone and the 100 simple moving average (4 hours). Immediate resistance is near the $6.50 level. There is also a key bearish trend line forming with resistance at $6.50 on the 4-hour chart of the DOT/USD pair.

DOT Price (Polkadot)

Source: DOTUSD on TradingView.com

The next major resistance is near $7.00 or the 61.8% Fib retracement level of the downward move from the $7.58 swing high to the $6.03 low. A successful break above $7.00 could start another strong rally. In the stated case, the price could easily rally toward $8.20 in the near term. The next major resistance is seen near the $10.00 zone.

More Downsides in DOT?

If DOT price fails to start a fresh increase above $7.00, it could continue to move down. The first key support is near the $6.00 level.

The next major support is near the $5.65 level, below which the price might decline to $5.00. Any more losses may perhaps open the doors for a move toward the $4.20 support zone or the trend line.

Technical Indicators

4-Hours MACD – The MACD for DOT/USD is now losing momentum in the bearish zone.

4-Hours RSI (Relative Strength Index) – The RSI for DOT/USD is now below the 50 level.

Major Support Levels – $6.00, $5.65 and $5.00.

Major Resistance Levels – $6.50, $7.00, and $8.50.

Disclaimer: The article is provided for educational purposes only. It does not represent the opinions of NewsBTC on whether to buy, sell or hold any investments and naturally investing carries risks. You are advised to conduct your own research before making any investment decisions. Use information provided on this website entirely at your own risk.

Aayush Jindal

Aayush Jindal

Aayush is a Senior Forex, Cryptocurrencies, and Financial Market Strategist. He specializes in market strategies and technical analysis and has spent over 15 years as a financial markets contributor and observer. He also founded an IT company and works rigorously in providing high-quality software services. Aayush possesses strong technical analytical skills and is well known for his entertaining and informative analysis of the currency, commodities, Bitcoin, and Ethereum markets. Follow him on Twitter @AayushJs.

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