Polkadot’s price was tracing a bullish pattern, suggesting a possible decline to $7.9 before initiating a bullish upturn. However, it recently fell below a crucial support level, triggering a bearish trend and leading to a significant decrease in its market capitalization.
Despite this, a new bullish pattern has emerged on Polkadot’s chart, indicating a potential reversal in its fortunes.
Polkadot’s Battle with Bearish Trends Amid Hope for Bullish Reversal
Polkadot faced a critical juncture recently, where it needed to test its support level around $9.2 to kickstart a bullish momentum. However, it failed to reach this crucial point, resulting in a continuous decline in value. Over the past week, DOT recorded a significant drop of more than 13%, with a 2% decrease in the last 24 hours alone. Currently trading at $8.28, Polkadot’s market cap stands at over $11.8 billion.
Despite these challenges, there are signs of hope for investors. FLASH, a renowned crypto analyst, highlighted a bullish pattern forming on DOT’s chart, suggesting a potential uptrend. However, it’s important to note that Polkadot’s price is still within this pattern, indicating the possibility of further losses before a breakout and subsequent bullish rally. According to analysis, there’s a high likelihood of DOT testing $7.9 before experiencing a breakout above the resistance level.
Analyzing Polkadot’s Derivatives Market Metrics Amid Bearish Trends
As Polkadot faced the possibility of further decline, a closer look at its derivatives market metrics was warranted. Coinglass’s data revealed a notable rise in DOT’s open interest despite its falling price. Typically, an increase in open interest suggests a continuation of the prevailing price trend, indicating a potential further decline. Additionally, the token’s funding rate declined in recent days, adding to the bearish sentiment.
Source: Coinglass
Technical indicators also favored the sellers, with Polkadot’s MACD displaying a bearish advantage and the Relative Strength Index (RSI) showing a downtick, signaling a potential price drop. However, the Money Flow Index (MFI) exhibited some bullish tendencies, trending upwards.
Source: TradingView
Despite these mixed signals, a bullish reversal for DOT might encounter obstacles at various resistance levels. Analysis from Hyblock Capital’s data indicated that Polkadot could face increased liquidation around $8.8. Therefore, for Polkadot to initiate a sustained bullish rally, it needs to surpass the resistance level in the near future.
Source: Hyblock Capital
Important: Please note that this article is only meant to provide information and should not be taken as legal, tax, investment, financial, or any other type of advice.
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