The Bitcoin market has experienced a sell-off as the new week began. This loss in value was seen in the altcoin market as well. Polkadot [DOT] has been one such major altcoin that witnessed a sudden fall making its way to the market and pushing its price down.
At the time of writing, DOT was being traded at $36.94 with a market cap of $34.07 billion.
Polkadot one-hour chart
Source: DOTUSD on TradingView
The value of Polkadot was rising and had managed to breach the resistance. However, as the price began to consolidate above $38.85, a selling pressure evolved giving rise to a sudden drop in the value of DOT.
The asset lost almost 10% of its value in 12 hours, however, it was now seen building higher. The current market was volatile and may require some stability before another price swing could be visible.
Reasoning
The Bollinger Bands were largely diverged, indicating the wild price movement witnessed in the past day. This meant that the market was extremely volatile. Meanwhile, the falling value paved the way for bears to take a lead, as the signal line moved above the candlesticks. The 50 moving average also took a position over the price bars, which was an indication of the dent the sell-off caused in the value of DOT.
As the digital asset recovers, the relative strength index noted that after touching the oversold zone, DOT bounced back. However, the chart highlighted that it has remained close to the oversold zone. Due to this, the market also indicated a negative momentum which was becoming increasingly bearish.
Conclusion
The current Polkadot market is extremely volatile. The digital asset has lost more than 10% of its value overnight. It will have to recover from the current market trend to witness a price swing in favor of the traders in the market.
