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Polkadot Price Analysis: DOT In The Red As Crucial Support Cracks

Polkadot Price Analysis: DOT In The Red As Crucial Support Cracks

Table of Contents

  1. Polkadot (DOT) Back In The Red
  2. Where Does Polkadot (DOT) Go From Here? 

The Polkadot DOT) price is back in the red as it slipped below the crucial $7 level and the 20-day SMA, as bearish sentiment returned on Friday. 

DOT is currently trading at $6.74, but the price has not seen any significant movement so far, as trading remains muted. 

Polkadot (DOT) Back In The Red

The Polkadot (DOT) price registered a sharp drop on Friday, deflating expectations as it slipped below a crucial support level at $7. The DOT price had been relatively static since May 2, when it registered an increase of 5.51% to go above $7 and the 200-day SMA. However, by May 4, the price was back in the red, dropping below the 200-day SMA but crucially staying above $7 at $7.13. DOT registered an increase of 2.52% on May 5 but was back in the red on the 6th, dropping by 2.46% and settling at $7.13. 

DOT’s downward trajectory continued on Tuesday (7th) and Wednesday (8th), with the price falling to $6.98. However, the 20-day SMA was acting as support at this level, and DOT recovered on Thursday (9th), rising by 1% to $7.05. Investors were hopeful that DOT could build from $7, and buyers could take the price past the 200-day SMA to $7.50.

However, Friday (10th) saw bearish sentiment return to the markets, as the DOT price crashed by 4.40%, going below the 20-day SMA and the $7 price level, dropping to $6.74, as shown in the chart above. The current session sees sellers in control, with DOT trading at $6.72, 0.30% lower than yesterday. Should sellers continue to dominate the session, we could see DOT drop lower. Analysts were expecting a minor downtrend in the near term, targeting the $6.40 level. Bullish momentum had waned around the $7.4 mark, indicating a balance between buyers and sellers. 

Where Does Polkadot (DOT) Go From Here? 

As depicted in the chart below, DOT has been oscillating between the 20-day SMA and the 200-day SMA for the majority of the past week. Presently, sellers have managed to push the DOT price below its support level at $7. However, there is still hope for DOT. It retains a robust support level at $6.40. If sellers persist, DOT could drop to this support level. From there, we could witness a potential recovery and a rebound towards $7. The MACD and the Parabolic SAR are both currently bullish, indicating a possible recovery for DOT in the short term.

With the recent uncertainty around Polkadot’s (DOT) price, a look at the futures market sentiment could give a clue regarding future prospects. Following its recent decline and sideways consolidation, Open Interest and Funding rates have registered a considerable decline. A similar pattern was observed at the beginning of the year, resulting in heightened demand and the beginning of a strong bullish phase.

Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.

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