Polkadot (DOT), a significant player in the blockchain ecosystem, is currently experiencing a dramatic decline, causing bear alarm. The cryptocurrency is plummeting and its price is plummeting towards modern lows. A combination of market-wide volatility, negative investor sentiment and regulatory pressures are fueling this piercing downturn. As the value of DOT continues to decline, investors are advised to prepare for further losses and re-evaluate their strategies in airy of these bearish signals.
In this analysis, we will look at Polkadot’s price outlook using some technical indicators focusing on the 1-hour and 4-hour time frame.
DOT price remains actively bearish
The DOT price on the 4-hour chart made a correction after a break from the previous one bearish triangular wedge and started falling again. Although the price is currently trying to rise, the reality is that it will continue to fall later.
The formation of a 4-hour Composite Trend oscillator also suggests that the DOT price may continue to decline as the indicator’s signal line and basic moving average (SMA) are currently located near the oversold zone.
Additionally, on the 1-day chart, DOT is attempting a bullish move below the 100-day SMA after a bear candle dropped the previous day. Based on the one-day price pattern, it can be suggested that this upward move that DOT is making is short-term in nature.
Finally, the 1-day Composite Trend Oscillator on the daily chart signals that the DOT price continues to actively move lower as both the signal line and SMA have crossed below the zero line and are heading towards the oversold zone.
More losses ahead?
To summarize, Polkadot is currently in a precarious situation as it experiences a piercing and sustained decline, triggering bearish alarm. Therefore, if the DOT price continues to decline, it could approach the $4.809 support level. And if it breaks below this level, it will fall further to test the $3,542 support level and possibly others key levels Later.
However, if DOT decides to continue moving higher, it will start moving towards the $7.701 resistance level. If the stock breaks above this level, it will move higher to test the $9.805 level and will likely move higher to test other key levels.
At the time of writing, DOT was trading around $6.23 and down 2.58%, with a market capitalization of over $8.9 billion and 24-hour trading volume of over $204 million. Although the company’s market capitalization decreased by 2.52%, its trading volume increased by 19.08% in the last day.
Featured image from Adobe Stock, chart from Tradingview.com
