Since 22nd June, Polkadot has regularly visited its demand zone of $13.8-16.3 due to several retracement stages in the market. Monthly losses have now amounted to 34.4% and the lack of buying pressure has affected DOT’s market structure. Volatility reduced over the past week, which resulted in some sideways movement for DOT but prices dipped once again on the back of a wider correction in the broader market. At the time of writing, DOT traded at $14.65, down by 6% over the last 24 hours.
Polkadot 4-hour chart
A look at DOT’s chart showed that its ascending channel was still intact despite recent losses. However, bearish sentiment was high as the candlesticks moved below their 20 (red) and 50 (yellow) Simple Moving Average lines, which failed to offer support to DOT’s decline. Moreover, prices tested the lower trendline at press time and there were possibilities of a breakdown from the pattern. In such a case, DOT could head towards its 22nd June swing low of $13- an outcome that would represent another 10% decline from the press-time level.
Directional Movement Index’s -DI gained some more distance on the +DI and suggested that a bearish trend was strengthening in the market. ADX, while still at 20, did point upwards and a move above 25 would indicate chances of an even sharper retracement over the coming sessions.
Squeeze Momentum Indicator noted the buildup of bearish momentum but prices were still in a ‘squeeze’. On the other hand, Stochastic RSI did offer some respite. The index saw a bullish crossover in the oversold zone and suggested that losses would be in check.
The lack of volatility could result in lateral movement for DOT between $14.1 and 14.6 over the coming sessions. However, there were chances of an even sharper sell-off towards 22nd June swing low of $13. Traders are advised to exercise caution with regards to DOT’s short-term trajectory but can opt to go long in case prices touch the $13-mark.
Credit: Source link