DOT is trapped in a descending channel, bulls need to change the direction of these indicators
follow report of CoinShares, Polkadot, one of the best-known multi-chain networks in the market, saw an outflow of up to $ 40 million this past weekend due to “uncertainty in parachain auctions ending on 17th and 12th”.
In the short term, the DOT price does not react negatively. In fact, after hitting a low of $ 24.72 on December 3, DOT managed to regain some of what it lost.
DOT 4-Hour Price Chart | Source: Tradingview
DOT is clearly at an indecisive moment. Currently, DOT is trading at around $ 29, just below the 61.8% Fibonacci. Looking at the chart below, the aforementioned Fib was quite a strong support over the September to October period, so it’s important for the DOT to avoid dropping below $ 27.4 at the moment.
DOT price table and key levels | Source: TradingView
However, since early November, DOT has been trading below the moving averages. Since then, the property has lost almost 50% in value. It can be seen that the price has sunk in a descending channel.
So if bears reappear and gain the upper hand from now on, the DOT will fall lower. The next big support is around the 78.6% Fib level which means the DOT decline could be as high as 30%. Even so, the asset has 2 other minor levels of support just below its current price (around $ 24 and $ 22).
It will be interesting to see if these levels can save the DOT.
Indicators point to a bearish outlook
The status of the indicators reflects the negative trend. For example, the average transfer value between addresses has tended to decrease over the past few days.
Whenever this metric hits its high, the DOT price usually does not hit a local high in the next few days, like in May, September and November of this year.
This is not surprising, as the number of active addresses tends to fall below the November high. Hence, both of the above indicators need to change direction to support resilience. DOT retracement.
However, given the current forecasts, it looks like the price will fall in the next few days. If support levels hold, losses will be limited. On the contrary, it is more likely that DOT will lose almost 1/3 of its value.
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