DOT Drops Over 30% But Finds Support At $6, What’s Next?
Polkadot‘s price recently experienced a significant 33% decline triggered by news of the Iran-Israeli conflict on April 14. However, the price found support at the critical 200-day moving average, indicating a potential period of consolidation correction.
polkadot Price Technical Analysis
By Shayan
Daily Chart
A detailed examination of the daily chart reveals a significant bearish trend; Polkadot is experiencing a 32% decline following the recent alarming news that Iran invaded Israel on April 14.
This decline breached many critical support levels and triggered a significant long-term squeeze event in the persistent markets, leading to the liquidation of numerous long positions.
In other words, the recent decline has intensified selling activity in the market by triggering a series of sell-stop orders. However, DOT price found support at the critical 200-day moving average, currently at $6.9, and staged a slight recovery.
The most likely outcome going forward is that the cryptocurrency will enter a consolidation phase in the key price range extending from the dynamic support of the 200-day moving average to the critical resistance of $9 in the medium term.
Source: TradingView
4-Hour Chart
Comprehensive Polkadot price analysis on the 4-hour time frame shows that after a failed attempt to surpass the $9 resistance zone, DOT faced increasing selling pressure, leading to a significant decline.
The breach of the critical $8 support zone acted as a catalyst for this pullback and pushed the price towards the important $6 support level.
However, the cryptocurrency exhibited a minor uptrend after reaching the critical $6 support zone, indicating the presence of demand at this level.
However, Polkadot is expected to continue its correction move, with the next target lying in the price range between 0.5 ($7.4) and 0.618 ($7.8) Fibonacci levels.
Source: TradingView
Sentiment Analysis
By Shayan
On April 14, Polkadot suffered a significant downturn caused by the escalating conflict between Iran and Israel.
Geopolitical tensions have severely impacted traders and raised concerns about increased volatility and potential price declines. The sudden increase in volatility directly affected traders who were constantly engaged in futures contracts, leading to the forced liquidation of long positions totaling approximately US$14 million.
This latest event in particular was the most significant long liquidation event since May 2022. As a result, the futures market appears to have cooled, paving the way for a potential rally towards higher price thresholds.
But these developments are a stark reminder of the market’s sensitivity to large volume transactions, especially when impacted by major news events.
Source: TradingView
This article was powered by Polkadot.
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Cryptocurrency charts from TradingView.
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