Polkadot Price Analysis: DOT Sits Above Crucial Support With Upside Locked By 20-Day SMA

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This week, Polkadot (DOT) has been under pressure from bears, as pessimistic views have dominated the crypto market.

Polkadot is experiencing a notable increase in the number of new users joining its platform at an accelerated rate. This uptick in user adoption might potentially boost the value of DOT and reverse its recent price decline, according to industry experts.

Is DOT In A Downward Trend?

Over the past month, the DOT price has dropped significantly. It reached a peak of $11.80 on March 15th, but since then, it has declined by more than 22%. However, if we examine Polkadot’s fundamental data from its Parity Data dashboard, we observe an impressive user onboarding rate. Although network activity has been relatively low lately, the addition of new users is a promising sign of increasing adoption for the Polkadot Network.

New Additions

In March, there was a substantial increase in new users on the network, causing the number of active wallets to surpass 600,000 and unique accounts to reach an astounding 5.59 million. This growth can be mainly attributed to Polkadot’s Parachains like Moonbeam, which are popular among developers. However, transaction volumes have not yet matched the surge in user numbers. It is assumed that users might be holding or staking their DOT tokens instead of utilizing them for transactions due to insufficient engagement.

DOT Price Analysis

The current price of DOT is at $8.37, representing a decrease of 1.27% or $1.27 over the last 24 hours. DOT experienced a significant upward trend from October last year, with its price rising from $3.70 to $9.19 by December 25th. Following this, the price dropped to $6.33 on January 22nd due to bearish sentiment. However, another major uptrend occurred between January and March, pushing the price up to a high of $11.80. Lately, bears have taken control of the market, causing DOT’s price to face strong downward pressure since its recent peak. You can refer to the chart below for a visual representation of this trend.

By March 16th, DOT‘s value dipped beneath the 20-day simple moving average (SMA), reaching a low of $8.77. The 50-day SMA provided some stability, allowing DOT to regain a small amount of ground. Yet, with the 20-day SMA acting as an obstacle, DOT failed to maintain its progress and slid further down to $8.58. Subsequently, it plummeted below the 50-day SMA, touching a new low at $8.43 where it found some buying interest.

Due to the 20-day simple moving average (SMA) acting as a hurdle, DOT is encountering resistance around $9. Meanwhile, $8.40 serves as a potential support level, which is currently being put to the test. In case DOT‘s price falls below this support, it may slide down to $8. On the other hand, if DOT manages to bounce back, it could challenge the resistance at $9 once more.

Will Bullish Sentiment Return?

In simpler terms, the battle between buyers and sellers is intense for DOT at the current price of $8.40. Nevertheless, the overall market trend is downward as suggested by the MACD. It’s uncertain if positive sentiment will return soon. However, if DOT manages to break past its resistance at $9, then buyers might regain control and push the price up towards $10.

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2024-04-12 16:18