Can DOT challenge the current downtrend?
Since hitting an all-time high on Nov. 4, the polkadot bears have been in complete control of the DOT’s decline in the parallel channel (yellow). The recent decline pushed the price below the 6-month trendline support (now resistance).
A close below the control point (red) near $17.2 increases the likelihood of a deeper decline that is likely to result in a buyer-seller clash in the $17-$14 range before moving higher comes.
The recent bearish streak (from its ATH) saw the altcoin lose more than 71% of its value, falling to a 25-week low on Jan. 1.
As the control point acted as a strong buy zone, the DOT reversed and formed a bearish flag on its daily chart.
While the bearish flag breaks below the 6-month support (now resistance), the price has yet to break out above the 20-50 EMA, increasing the likelihood of high volatility in the coming days. Furthermore, after the first retest of trendline resistance, the altcoin reversed course, confirming the downtrend.
Thus, once the closes below $17, it will be a major confluence that will confirm the downtrend. If so, the altcoin is likely to retest the $14 level in the coming days.
The RSI has been struggling to find a close above the midline since mid-November, confirming the downtrend. Now it’s towards 32.
The Squeeze Momentum Indicator showed a gray dot on February 20, forecasting a period of high volatility. With -DI trending north, DOT remains limited to signs of a solid recovery.
DOT has lost key 61.8% Fib support, coinciding with 6-month trendline resistance, further amplifying the current downtrend. Once the DOT is below the control point, it is expected to find a bottom near $14 before an uptrend.
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