- Market sentiment around Polkadot turned bearish.
- Metrics revealed that selling pressure was rising on DOT.
The crypto market turned bearish in the last 24 hours as most cryptos suffered price corrections, and Polkadot [DOT] was not an exception.
In fact, DOT was most severely hit among the top 20 cryptos in terms of market capitalization. Therefore, AMBCrypto investigated further to see whether DOT can recover from this anytime soon.
Polkadot’s latest price correction
While several cryptos witnessed slight pullbacks, Polkadot’s value dipped by nearly 10% in the last 24 hours alone.
At the time of writing, the token was trading at $9.49 with a market cap of over $14.44 billion, making it the 15th largest crypto.
The bad news was that DOT’s trading volume increased by 15% in the last 24 hours, which acted as a foundation of this price decline.
This declining price trend also had a negative impact on the token’s social metrics. Santiment’s data revealed that DOT’s social dominance plummeted sharply—a sign of the dropping popularity of the token.
On top of that, Polkadot’s Weighted Sentiment entered the negative zone. This indicated that bearish sentiment around the token was rising in the market.
Source: Santiment
Can DOT recover soon?
AMBCrypto then checked other data sets to find out whether they show signs of a recovery from this bearish trend in the near term. We found that while DOT’s price started to drop, investors chose to sell their holdings.
Hyblock Capital’s data pointed out that DOT’s sell volume spiked multiple times in the past 24 hours, and even surged to 100 on one instance.
For starters, a number closer to 100 reflected high selling activity happening in the market for a particular token.
Source: Hyblock Capital
Apart from that, Polkadot’s Funding Rate also declined slightly, as per Coinglass’ data. A decline in Funding Rates in cryptocurrencies indicates that short positions are becoming more dominant.
This can be a sign of a bearish sentiment in the market.
Like the sell volume indicator, the Relative Strength Index (RSI) also painted a similar picture. The indicator registered a sharp decline-an indication of rising selling pressure.
In case of a continued downtrend, DOT might first drop to its 20-day SMA support, as suggested by the Bollinger Bands. At that level, DOT might get a chance to kickstart a bull rally and recover.
Source: TradingView
Notably, not only did Polkadot’s price drop, its network activity also followed a similar trend.
Read Polkadot’s [DOT] Price Prediction 2024-25
AMBCrypto’s look at Artemis’ data pointed out that both DOT’s daily active addresses and transactions dipped sharply over the past few days.
This meant that users weren’t actively utilizing the blockchain, which can cause further trouble for DOT.
Source: Artemis
