Key Takeaways
- After losing all gains from its $5 breakout, Polkadot now trades at $3.58, forming a potential double bottom.
- DOT has been confined within a falling channel since May 23, with $4.45 as a significant resistance zone.
- If current conditions hold, DOT could fall to $3.32 support, possibly below $3, should bulls fail to hold the line.
Polkadot (DOT) is finally getting some breathing space for the first time since last month.
Since May 18, Polkadot’s price has shed 22% of its value, effectively wiping out all gains from its breakout above $5.
As of this writing, DOT changes hands at $3.58, aligning closely with CCN’s May 20 analysis, which anticipated a retest of this level.
While the altcoin appears to have found a local bottom, a rebound remains unlikely.
Polkadot Stabilizes
Polkadot’s price has been confined within a descending channel for several weeks. On the daily chart, this downtrend appears to have led to a double bottom pattern near $3.58, a level first tested on April 8.
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Following that initial touch, DOT rebounded, climbing to a local high of $5.35 roughly a month later. While the cryptocurrency has now revisited the $3.58 support, a repeat of that upward move may prove difficult.
The key obstacle is that DOT remains below the upper boundary of the falling channel. This continues to act as resistance. Bulls may struggle to initiate a sustained recovery without a decisive breakout above this trendline.
In this setup, the Awesome Oscillator (AO) is below the zero line, indicating bearish momentum; likewise, the Relative Strength Index (RSI) supports the AO’s signs.
If this trend continues, Polkadot’s price might find it challenging to retest the supply zone at $4.45.
DOT Price Analysis: Bounce Delayed
A closer look at the 4-hour chart reinforces Polkadot’s bearish outlook. DOT continues to trade within a descending channel that has persisted since May 23.
This indicates weak demand and sustained downward pressure in the short term.
Adding to this outlook, the Moving Average Convergence Divergence (MACD) has slipped into negative territory. This indicates a clear shift in momentum toward the bears.
This crossover into the bearish zone suggests that selling activity has intensified, reducing the likelihood of a near-term breakout unless a reversal signal emerges.
Echoing the MACD’s bearish signal, the Supertrend indicator has also turned negative. As seen below, the red line has risen above Polkadot’s price.
This position reinforces the downtrend, indicating that resistance is now firmly in place and any bullish attempts may be met with rejection unless market conditions improve.
Regarding its short-term targets, DOT’s price could move down to $3.32 at the underlying support. If bulls fail to defend this region, the cryptocurrency’s price might decrease below $3.
On the flip side, if Polkadot bulls drive the price above the upper trendline of the falling channel, this forecast might change. If that were to happen, DOT might rise toward $4.58.
Disclaimer:
The information provided in this article is for informational purposes only. It is not intended to be, nor should it be construed as, financial advice. We do not make any warranties regarding the completeness, reliability, or accuracy of this information. All investments involve risk, and past performance does not guarantee future results. We recommend consulting a financial advisor before making any investment decisions.
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