Is DOT in Danger of Falling to $5 Soon?
Polkadot price experienced increasing selling pressure, which led to a break below the important $6 support zone.
This development indicates that the downward trend continues in the market and the potential for the downward trend to continue.
Technical analysis
By Shayan
Daily Chart
The daily chart shows that DOT is facing an aggressive selloff near the critical $6 support zone, leading to a notable breach of this decisive support level. T
This underlines the intense selling pressure in the market, and it is worth noting that this is specific to all altcoins, not just DOT. The price has fallen below the lower bound of a multi-month triangle and the lower bound of previous major declines, signaling a significant downtrend.
Additionally, the 100-day moving average has crossed below the 200-day moving average, indicating a death crossover. This development also indicates that a downward trend is dominant. Given this context, the price is likely to decline towards the important $5 support zone, and there could be a period of consolidation around this level.
Source: TradingView
4-Hour Chart
On the 4-hour chart, DOT experienced increased selling activity, resulting in bearish pullbacks. These pullbacks led to the formation of a bearish price channel in which the cryptocurrency is currently hovering at its lower boundary.
Following the break below the critical $6 threshold, the price completed a pullback to the broken level, further confirming the bearish scenario.
DOT is expected to face increased volatility in the short term and continue to pull back towards the critical $5.4 support. On a broader scale, a period of consolidation between $5.4 and $6 is expected in the medium term.
Source: TradingView
Sentiment Analysis
By Shayan
Following the recent break below the critical $6 support zone, polkadot‘s price triggered a significant long squeeze event, liquidating a significant number of long positions. This development is crucial to understanding potential future movements of the market.
The accompanying chart shows potential liquidation levels in Polkadot’s price action and provides insight into where the smart money might be focusing in the medium term. There is currently significant liquidity near the $6 level, which likely consists of buy-stop orders from aggressive short positions initiated near this critical threshold.
In the event of a bullish correction, $6 will be the primary target for buyers looking to take advantage of liquidity and potentially complete a pullback to the previously broken support level.
Source: Coinglass
However, the price’s ability to collect liquidity at this level may also affect the sustainable continuation of the downward trend.
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Cryptocurrency charts from TradingView.
#DOT #Danger #Falling