Polkadot Price Analysis: Can DOT Stem Its Prolonged Decline?

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As a seasoned crypto investor with battle-scarred fingers and a heart full of scars from past bear markets, I must admit that the current plunge of Polkadot (DOT) has left me feeling like a shipwreck survivor clinging to a driftwood, but not ready to give up hope. The 11% drop during the past week has certainly added another layer of salt to my wounds, but I’ve learned that the crypto market is as unpredictable as a rollercoaster ride in a haunted house on Halloween night.

Over the last seven days, the price of Polkadot (DOT) has fallen by nearly 11%. The pessimistic outlook surrounding this asset seems to be growing stronger, causing it to come under closer examination as investors reconsider their investments.

Although the price of DOT has dropped significantly since March, some optimistic signs can be observed from on-chain data. For instance, daily active users have been rising, and on-chain volume is currently at an all-time high. One analyst foresees a potential 2x increase if DOT manages to break free from its current downward trend.

Polkadot (DOT) Price Plummets

Over the past week, Polkadot (DOT) has persistently declined, with every day showing a loss and breaking a significant support level. On Sunday, DOT hit a low of $5.72 but tried to rise above $6 on Monday, peaking at $5.88. However, the upward momentum halted, giving sellers an opportunity to regain control, causing DOT to drop by 1.05% and close at $5.66. The downward trend continued on Tuesday with a 2.30% decrease, and DOT fell below $5.50 on Wednesday, ending the day at $5.39. On Thursday, selling pressure intensified, pushing DOT to its daily low of $5.03. However, a strong demand was observed near the $5 price level, causing a rebound, and by the end of the day, DOT settled at $5.34 after a 0.93% decrease.

As a crypto investor, I’m observing that DOT is currently trading at $5,26, representing a 1.50% decrease since yesterday. Sellers seem to be pushing the price downward, but let’s consider where DOT might head next. The recent rebound from $5 on Thursday could offer some insight. If DOT were to drop back to $5, we might see a price recovery. However, for DOT to surpass the resilient barrier at $6, demand must strengthen at higher levels first. For a push towards $6, bulls need to hold the $5 line and drive DOT above $5.50. If the price can bounce back from this level, we could potentially see DOT challenging the $6 mark.

On-Chain Metrics Remain Robust 

In spite of the heavy selling influence causing DOT to decline, the network’s on-chain activity remains robust, with approximately 1.3 million daily holders. Data from Polkadot Subscan indicates a 19.21% surge in daily active users. Although open interest is minimal, the long/short ratio stands at 2.83, suggesting that most traders anticipate a price rise. The market remains cautious, but it’s not dismissing the possibility of a recovery in the near future.

One analyst is quite hopeful about the future prospects of DOT, noting that the price is currently in a falling wedge pattern, which often signals a potential price increase. The analyst suggested it could be a good time to buy DOT before a potential 2x breakout.

“As an analyst, I’m observing that $DOT is currently consolidating within a ‘falling wedge’ pattern. This suggests a potential reversal in its price trend. If you’re considering investment, it might be wise to accumulate $DOT now, as the mid-term outlook seems promising. I anticipate a bullish rally post the breakout from this pattern, potentially doubling the current value.”

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2024-08-02 17:08