As the cryptocurrency market grapples with a significant downturn, Polkadot (DOT) is facing increasing pressure to maintain its position above the crucial $4 support level. The recent bear cycle has intensified, with Polkadot experiencing a substantial decline of 63% in the past five months.
The bearish trend has been exacerbated by a falling channel formation on the daily chart, which has seen Polkadot break below the psychologically significant $5 mark. The price action has been characterized by a series of bearish candles, culminating in a double-bottom pattern with a neckline at $4.20.
On a shorter timeframe, the 4-hour chart reveals a bearish ABCD pattern, further reinforcing the downward pressure on Polkadot’s price. The failure of the bullish trendline to absorb incoming supply has resulted in a breakdown, pushing the price below the $4.50 level.
Technical indicators such as the DMI and MACD are also signaling a bearish bias. The VI lines in the DMI indicator show a widening bearish gap, while the MACD lines remain in bearish alignment, indicating growing selling pressure.
Despite the mounting bearish sentiment, there are indications that Polkadot may find support at the $4 level. Fibonacci levels suggest that the recent decline has breached the 61.80% level but has not yet reached the 78.60% level. This suggests that there may be potential for a bullish reversal before Polkadot’s price plummets further.
In conclusion, Polkadot is currently facing a challenging period as it battles against the intensifying bear market. While the bearish momentum is strong, there are potential support levels at $4.143 and $3.891 that could provide a lifeline for bulls. However, the ultimate outcome will depend on broader market conditions and the ability of Polkadot to withstand the ongoing selling pressure.
Disclaimer: The information in this article is for general purposes only and does not constitute financial advice. The author’s views are personal and may not reflect the views of Chain Affairs. Before making any investment decisions, you should always conduct your own research. Chain Affairs is not responsible for any financial losses.
About The Author
