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

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As an experienced analyst, I see Polkadot (DOT) exhibiting bearish signs below the $8 resistance against the US Dollar. The price could extend its decline if it fails to stay above the crucial support level of $6.00.

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

As a researcher studying the cryptocurrency market trends, I’ve noticed that DOT‘s price had been steadily climbing. However, I encountered resistance around the $7.60 mark. Consequently, DOT formed a short-term top and commenced a fresh decline, dropping below the $7.00 threshold, much like Ethereum and Bitcoin did.

As a researcher, I’ve observed a significant drop in price beneath the $6.20 support level. The lowest point was reached at approximately $6.03. Currently, the market is in a consolidation phase, recovering some losses. The price is inching upwards, surpassing the $6.35 mark and the 23.6% Fibonacci retracement level of the downtrend from the $7.58 peak to the $6.03 low.

As a researcher studying the DOT market, I’ve noticed that the current price is now hovering beneath the $7.00 threshold and falls short of the 100-simple moving average (SMA) on the 4-hour chart. The immediate barrier to upward movement lies around the $6.50 mark. Furthermore, a significant bearish trendline has emerged on the same chart, with resistance at the $6.50 level.

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

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?

As a researcher studying the dynamics of DOT prices, I’ve noticed that if the price doesn’t manage to surge above the $7.00 mark, there’s a strong possibility it could head lower. The first noteworthy support lies in the vicinity of the $6.00 level.

As a researcher studying the market trends, I’ve identified the next significant support level close to $5.65. Should the price drop below this point, it could potentially lead to a decline down to $5.00. Any further losses might then pave the way for a potential shift towards the $4.20 support zone or following the trendline.

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.

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2024-05-01 08:10