Polkadot bears have dominated since the alternative coin hit its ATH on November 4, translating to declines between southward parallel lines. The latest plunge had the crypto under 6-month trend-line support (currently resistance).
A significant-close under the Point of Control around $17.2 would open the road to more declines. However, this decline might witness a clash between sellers and buyers around the $14 – $17 value level before a trend internment action. While writing this content, DOT traded near 417, following a 4.5% drop within the past 24 hours.
Polkadot Daily Chart
The recent bearish period (from the ATH) saw DOT losing over 71% while plummeting towards 25-week lows on January 24. As the Point of Control acted as a massive buying level, the altcoin reversed to print a bearish flag in its daily price chart.
Though the bearish flag dipped beneath the 6-month-long foothold, the current price doesn’t exhibit overstretched conditions from the 20-50 exponential moving average. That increased high volatility chances within the coming days. Moreover, DOT reversed following the initial retest of the trend-line resistance, authorizing the downtrend.
Therefore, a decisive close below $17 remains a critical confluence to confirm DOT’s downside trends. With that, Polkadot targeted a potential retest of $14 in the upcoming days. Nevertheless, enthusiasts may need to watch the February 20 candlestick to determine potential bullish revivals.
Reasoning
The Relative Strength Index couldn’t close beyond the midline since November. That affirmed bearish trends. For now, the indicator appeared south to the 32-level, following a 37-point decline. Moreover, the Squeeze Momentum Indicator (SMI) flashed grey dots on February 20. The reading suggested a high volatility period for DOT. Also, the north –DI is yet to confirm massive recovery signals.
Final Thought
Polkadot lost the crucial 61.8% FIB support that matched the 6-month long resistance. That confirmed the current downtrend’s strength. Retracements beneath the Point of Control would secure footing around $14 before a trend-compelling move.
Nevertheless, the global market sentiment remains vital to analyze technical factors for profitable actions. Also, buyers keep purchasing the dips, supporting the possible bullish breakout for DOT.
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