Analysis
DOT sinks to new lows, but positive signs emerge
Bullish defense of key $5.23 support zone finally succumbed to the intense selling pressure, as DOT sunk to December 2022 lows.
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Selling pressure saw DOT sink to December 2022 lows.
- Long positions on the futures market flashed positive for bulls.
The crypto market continued to react negatively to the recent regulatory crackdown on cryptocurrencies. Polkadot [DOT] was no different as its price took a 13.8% nosedive in the past 24 hours.
Read Polkadot’s [DOT] Price Prediction 2023-24
Bitcoin [BTC] also fell to $25.6k at the time of writing, with the market largely dominated by bears.
Can $4.24 support level halt the bearish momentum?
Source: DOT/USDT on Trading View
DOT has been on a massive bearish slide since 18 April after price got rejected at the $7.02 resistance level. This saw price break through the $6.12 support level before bullish reinforcement at the $5.23 support level.
The price traded at the $5.23 support level for a month-long period with bulls holding on to the level. However, the low buying pressure didn’t allow bulls to mount a significant rally. Recent bearish activity in the market gave DOT sellers another opportunity to break past the key support level.
A successful breach of the support level saw DOT decline to the December 2022 low of $4.24. However, price quickly bounced off the level, highlighting the bullish dominance in that price zone.
The short-term bullish defense was echoed by the Relative Strength Indicator (RSI) and the On Balance Volume (OBV). The RSI recorded a mild uptick after the aggressive dip into the oversold zone. The OBV also registered a 759.42k increase in volume.
However, the positive signs for bulls at this level didn’t negate the significant bearish dominance on DOT. Further dips by Bitcoin could see sellers register more downside.
How much are 1,10,100 DOTs worth today?
Longs took a beating in futures market
Source: Coinglass
The four-hour liquidation heatmap from Coinglass
showed massive losses for longs in the futures market. $263.41k of long positions were liquidated, accounting for 89% of total liquidations.However, open positions on the long/short ratio at press time told a different story. Longs held a 51.64% advantage on the four-hour timeframe. This hinted that market speculators were actively expecting the $4.24 support level to hold in the short term.
Source: Coinglass
