Polkadot: Why you need to watch out for DOT’s move to $4.6
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Polkadot has a bearish structure across higher and lower timeframe charts.
- A move to the $4.4-$4.6 region was possible but would be an opportunity for short-sellers to re-enter the market.
Polkadot [DOT] saw a bullish market structure break on the lower timeframe a few days ago. However, the bounce lost momentum at $4.8 and has since fallen below the $4.3 support. This showed that the temporary respite from selling pressure was a ruse.
Read Polkadot’s [DOT] Price Prediction 2023-24
The momentum was bearish once more, and the drop below $4.3 was a sign of intent from the sellers. Where is the next higher timeframe support zone that the bulls can look to make a stand at?
The breach of the HTF bullish order block meant sellers were in the driving seatOn the 1-day chart, Polkadot stood at $4.28 at the time of writing. The $4.56 (dotted orange) highlighted a lower high from the 4-hour chart, which was beaten on Monday 28 August. However, the bulls were unable to sustain the move and the bears seized control at the $4.8 mark.
The $4.27 level represented the low of the bullish order block on the 1-day chart. On Friday, 1 September, DOT closed a daily session below it. This flipped the order block to a bearish breaker, and meant that short-selling opportunities could arise should DOT bounce toward the $4.4-$4.6 region.
The Fibonacci extension levels showed that sub-$4 prices were a strong possibility for Polkadot in Q4 2023. The 23.6%, 50%, and 61.8% extension levels lie at $3.894, $3.495 and $3.317 respectively. Given the downtrend on the 1-day chart and the bearish market structure, it was likely that DOT would fall toward the $3.5 and $3.3 levels in the coming months.
The market sentiment was in bearish favor- have things changed?On 31 August, when DOT from $4.45 to $4.26, the Open Interest soared higher. This showed short sellers entering the market in large numbers and signified intense short-term bearishness.
How much are 1, 10, or 100 DOT worth today?
In the past 48 hours, DOT registered a bounce close to 3% higher. Yet, the spot CVD has been in a downtrend during this time.
It was evidence of continued selling pressure on the token and signaled the absence of strong buyers, which meant Polkadot was likely to drop lower on the price chart.