The short-term outlook for DOT is quite conservative as the token continues to make lower highs and lower lows. The next downside target for the altcoin is $13.17 if it fails to break the top of the corrective technical pattern at $21.77.

DOT firmly in downtrend

DOT has formed a descending parallel channel on the daily chart which is causing concern for DOT buyers. The altcoin is expected to fall 30% to $13.17 if key support levels are not held.

The first line of defense is the 78.6% Fib retracement level at $17.91. Additional selling pressure could prompt the DOT to test the support line at $16.95 provided by the Momentum Reversal Indicator (MRI), which coincides with the middle border of the parallel channel.

DOT could then next test the Jan. 24 low of $15.8 if bearish sentiment strengthens further. A drop below this level increases the possibility of a slide towards $13.17, where the lower border of the channel coincides with the 127.2% Fib extension.

Investors should note that in this case that target would be a low not seen since July 27th.

DOT/USDT daily chart. Source: TradingView

However, if buying pressure builds, DOT price can target the 21-day SMA at $19.49, which intercepts the 61.8% Fib retracement level.

A surge in buy orders may propel the DOT price towards the 38.2% Fib retracement level at $21.77, which coincides with the upper border of the channel.

If the price attempts to break above the upper trendline of the channel, the bearish outlook may become invalid.

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