Cryptocurrency

Will Polkadot [DOT] be subjected to sharp sell-off coming week

Disclaimer: The findings of the next evaluation are the only real opinions of the author and mustn’t be thought of funding recommendation.

Bitcoin [BTC] fell by almost 7% in latest hours of buying and selling and had a bearish short-term outlook but once more. Many altcoins additionally adopted and posted double-digit proportion losses over yesterday of buying and selling alone.

Polkadot [DOT] was considered one of these cash. The coin was in a position to climb to the $7.7 mark on the again of regular demand. However, the patrons shortly was sellers as worry gripped the market but once more.

DOT- 1-Hour Chart

Source: DOT/USDT on TradingView

Polkadot has traded inside the $7.7 and $6.9 space for a lot of the previous two weeks. The Volumpe Profile Visible Range software confirmed the Point of Control to lie at $7.25. This was the purpose at which essentially the most buying and selling quantity was witnessed over the seen vary. It marked a major stage of help, one which DOT smashed previous yesterday.

The Value Area Low (VAL) and High lay at $7.03 and $7.64. At the time of writing, the worth was beneath the VAL. The VAL represented an honest shopping for alternative, however the dip beneath $7 meant that lengthy positions would possibly be unsafe.

A revisit to the $7 and $7.3 may happen as the worth searches for liquidity. However, the $7.25-$7.3 belt would seemingly pose far an excessive amount of resistance for DOT to be in a position to break previous on its first couple of tries.

Rationale

Polkadot drops below the $7 support in the bloody aftermath of a sharp sell off

Source: DOT/USDT on TradingView

The Relative Strength Index (RSI) dropped from 60 to 22 over the course of yesterday’s buying and selling. The Moving Average Convergence Divergence (MACD) additionally noticed a sharp plunge beneath the zero line.

It was fairly easy that bearish momentum was dominant in latest hours. But can a reduction rally be anticipated for DOT?

The Accumulation/Distribution (A/D) indicator noticed a drop as nicely and was under a resistance stage from final week. A rejection at this stage may be a precursor to additional losses. The Chaikin Money Flow (CMF) additionally hinted at a bearish bias. It was firmly under the -0.05 mark to point out important promoting stress.

Conclusion

The value would want to flip $7.3 to help earlier than a bullish short-term bias can be justified. The quantity indicators would additionally want to climb previous their respective resistance ranges. It appeared extra seemingly {that a} transfer to $7.25-$7.3 would supply a promoting alternative than a shopping for one.

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