Polkadot Price Analysis: DOT Drops Perilously Close To Support Level

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As a seasoned crypto investor with several years of experience under my belt, I’ve seen my fair share of market volatility. The recent downturn in Polkadot (DOT) price has been particularly disconcerting, as it seemed to defy the bullish trend that had been developing at the beginning of May.

The price of Polkadot (DOT) has experienced a significant drop, largely caused by heavy selling among traders at the 200-day Simple Moving Average (SMA) and 20-day SMA levels, resulting in a slide towards the lower boundary of its price range.

If the price of DOT dips below its current support level, the downtrend may continue indefinitely, a potential development that investors need to keep an eye on and consider as a cautionary sign.

Polkadot (DOT) Continues To See Red 

As a researcher studying the Polkadot (DOT) price trends, I’ve noticed an upward trend at the beginning of the month which propelled the price to reach $7.27 and surpass both the 20-day and 200-day Simple Moving Averages (SMAs). However, this level faced repeated rejections leading to a decline below the 200-day SMA on May 6. The downward pressure intensified on May 7, pushing DOT down to $6.99 – a price point that the 20-day SMA fortified as support. Following a brief recovery, where the price climbed back above $7, bearish sentiments re-emerged causing a significant drop of approximately 4.43% on May 10, and subsequently falling below the 20-day SMA.

In simpler terms, DOT‘s sideways shift previously suggested a continuation of consolidation. However, the decline on May 10 increased the bearish outlook. Following this drop, DOT has continued to decrease, reaching a low of $6.41 on May 11 and 12, with a closing price of $6.62. The current week started off with volatility, causing DOT to plummet to a support level of $6.41 before rising back up to $6.67. On Tuesday, sellers aggressively pushed the price down but failed to drive it below this support level. Today, DOT has bounced back from its support level, and buyers have re-entered the market. The current price is now 1.70% higher than yesterday, standing at $6.59.

Looking Ahead

As a researcher studying the DOT chart, I’ve noticed that the price has demonstrated notable resilience around the $6.40 level during the current trading session. This support is evident from the way the price has rebounded every time it has dipped towards this mark. On the other hand, the 20-day Simple Moving Average (SMA) presents resistance at $6.90.

If sellers manage to force the DOT price down below its current support points, there’s a risk that this could trigger a chain reaction, potentially causing the price to plummet to $6 or even $5.5.

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2024-05-15 12:06