Polkadot (DOT) is at a crossroads as its recent recovery attempt loses steam, with renewed bearish pressure pushing the price back toward the crucial $3.5 mark. After showing signs of a rebound, DOT’s momentum has quickly reversed, casting doubt on its ability to maintain higher levels.
As bearish momentum resurfaces, the market is left wondering whether the bulls can mount a defense or will the bears drive the price even lower, setting the stage for further declines. With market sentiment hanging in the balance, all eyes are on DOT’s next move.
This analysis aims to explore why Polkadot’s recovery has lost momentum and how renewed bearish pressure is steering the price toward the key $3.5 level. We will assess the technical signals and market conditions that could determine whether Polkadot finds support at this critical juncture or continues to slide lower. This insight will help gauge the likelihood of a rebound or further downside in the near term.
DOT was trading at approximately $4.14 at the time of writing, reflecting a 2.49% decline. The cryptocurrency has a market capitalization of over $6 billion and a trading volume of $84 million. Meanwhile, over the past 24 hours, its market cap and trading volume have decreased by 2.47% and 11.83%, respectively.
Technical Analysis: Is $3.5 The Next Critical Support?
On the 4-hour chart, Polkadot exhibits strong bearish momentum as it continues to trade below the 100-day Simple Moving Average (SMA). The inability to break above this key moving average suggests that bearish pressure is redeveloping and that sellers are gaining control, which could lead to a further price decline toward the $3.5 mark.
Additionally, the Relative Strength Index (RSI) on the 4-hour chart has recently dropped below 50%, now sitting around 45%. This decline indicates increasing bearish momentum and suggests that selling pressure is intensifying.
Technical analysis on the 1-day chart also shows that Polkadot is making a bearish move toward the $3.5 support level, highlighted by the formation of a bearish candlestick. Additionally, the price is trading below the 100-day SMA, reinforcing the negative market sentiment and suggesting continued downward pressure.
Finally, the RSI signal line on the 1-day chart is currently sitting at 41% as it continues to trend below the 50% threshold, which implies that Polkadot remains under pressure, with the potential for bears to regain control and push the price lower.
Key Levels And Strategies For Polkadot
As DOT faces a downtrend, the $3.5 mark stands out as a significant support level that could determine the future price movement of the cryptocurrency. If bearish momentum persists and the price falls below this support level, DOT could experience additional declines, potentially targeting the $1.9 support level and probably other key areas afterwards.
Conversely, a rebound could occur if Polkadot holds above the critical support level, signaling a potential move toward the $4.8 resistance mark. Should DOT break above this level, it could continue rising to test the $6.2 level and potentially advance to explore other key resistance zones.
Featured image from Unsplash, chart from Tradingview.com