Imminent capitulation could see DOT drop to $11

DOT price has been sliding south since last Thursday. The altcoin has lost as much as 21% in just five days, returning near its three-month and 2022 lows.

DOT can fall 40% if it doesn’t regain momentum

DOT is at risk of flash crash. It is currently trading below all Ichimoku levels on the daily and weekly charts, warning of slight, fast, and violent moves south.

One condition remained on the daily Ichimoku chart before the DOT price experienced a flash crash and that was the wide range Chikou range. In the Ichimoku system, the Chikou range is broadly similar to the “price discovery mode” condition. It is a state where there is little or no support or resistance to prevent price action from moving in a single direction.

Chikou Span is another factor that can help traders spot and confirm potential trend reversals. It provides insight into the strength of the price movement that can confirm an uptrend when moving above the market price or a downtrend when moving below the market price. Therefore, if the DOT price closes at or below $18 daily, the Chikou range will range wide and the price will touch its weakest technical level since December 3, 2021.

Ichimoku Kinko Hyo Daily DOT/USD chart. Source: TradingView

The only chance to save the price is the possibility of a potential bullish divergence in favor of the bulls. However, lacking structural support from Ichimoku on the daily or weekly chart, the DOT is finding it difficult to move higher.

Eventually, if the bulls are to avoid the sell-off, they need to close above the Tenkan-Sen, Kijun-Sen and 38.2% Fib retracement levels at $22 and above. In that case, any near-term bearish outlook is likely to become invalid.

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