Polkadot Price Analysis: DOT Drops Perilously Close To Support Level
The Polkadot (DOT) price has witnessed a dramatic downturn primarily due to intense selling activity at the 200-day SMA and 20-day SMA, pushing it to the lower end of its trading range.
If sellers manage to breach the lower end of DOT’s trading range, the bearish trend could persist for the foreseeable future, a scenario that investors should be cautious about.
Polkadot (DOT) Continues To See Red
Looking at the Polkadot (DOT) price chart, we observe a bullish trend at the beginning of the month that saw the price rise to $7.27 and sit above the 20 and 200-day SMAs. However, the price faced consistent rejections at this level and dropped below the 200-day SMA on May 6. A further drop on May 7 saw the DOT price drop to $6.99, a level where the 20-day SMA acted as support. After a brief recovery that saw DOT climb back above $7, before bearish sentiment saw the price tumble by 4.43% on May 10, and drop below the 20-day SMA.
While DOT’s lateral movement was indicative of an ongoing consolidation, the recent drop (May 10) indicates a strengthening of the bearish sentiment. Since this drop, DOT has remained in the red on May 11 and 12, settling at $6.62. The current week began with a volatile day, which saw DOT drop to a low of $6.41 before recovering and rising to $6.67. Tuesday saw a significant drop as sellers pushed DOT to its support level but were unable to push the price any lower. The current session has seen DOT rebound from its support level, with buyers entering the market at this point. Currently, the price is up by 1.70% and sits at $6.59.
Looking Ahead
Looking at the chart, we can see that DOT has strong support at $6.40, a level from where the price has shown resilience during the ongoing session. The 20-day SMA is currently acting as resistance at the $6.90 level. Despite being trapped between the $6.40 and $7 levels for over a week, there is still potential for a significant bullish movement. If DOT manages to break past the 20-day SMA, we could see the price surge to the $7.50 mark, offering a glimmer of hope for a potential recovery.
However, if sellers are able to push the price below DOT’s current support levels, it could unleash a cascading effect and see the price drop to $6 or even $5.5.
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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