Polkadot unable to reclaim $4: Time to short?
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- DOT weakened further after it dropped below $4 and failed to reclaim it.
- DOT short-sellers had more market influence at press time.
Polkadot [DOT] posted more losses in early October as the bearish pressure persisted. Notably, the token shed over +10% between 2 October and press time’s value of $3.85.
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Meanwhile, Bitcoin [BTC] defended the $27k but was yet to rebound strongly ahead of the September CPI data release on Thursday (12 October).
In a previous DOT price analysis, AMBCrypto projected a possible break above $4 if the $3.9 support is defended. But the support was cracked as DOT’s lower timeframe traders can expect this.
Will sellers extend gains?
The extended drop below $4 formed a daily bearish order (OB) of $3.998 – $4.094 (orange). Above it lays another hurdle and a previously invalidated weekly bullish OB (red).
On the daily chart, DOT has been making lower highs since mid-August. The daily and H4 market structures were both bearish at press time, further cementing sellers’ market influence.
So, a BTC rebound towards $28k could tip DOT to mount above $3.9 but falter at the next roadblock at $4.0. So, if the bearish pressure persists, sellers could extend gains to $3.6 by using $3.9 and $4.0 hurdles for re-entry.
A successful mount above the roadblock at $4.0 will flip the H4 market structure to bullish and could allow bulls to focus on the $4.3 target.
Meanwhile, DOT’s Spot market demand declined massively from 2 October, as shown by retreating OBV. The negative RSI further confirmed the selling pressure as bearish pressure persisted.
Polkadot sellers had market leverage
The southward movement of the CVD Spot (Cumulative Volume Delta) further showed that sellers have more market influence at press time. The metric had no reversal by the time of writing, so sellers could overwhelm the market.
How much are 1,10,100 DOTs worth today?
On the other hand, the Open Interest rates spiked as DOT prices declined from 2 October. It meant that more players opened contracts to cover short positions and profit from the price drop.
So, sellers could extend their influence in DOT’s market unless BTC surges beyond $28k.