Polkadot reversals require a resistance area, what’s next for the DOT on the charts

Disclaimer: The information provided does not constitute financial, investment, trading or other types of advice and is the opinion of the author only

  • The bullish order block turned into a bearish breakout
  • Higher time frame market structure was bearish after the last move below $5.73

Polkadot dropped just below the $6.3 support area on November 9 in the wake of the widespread panic in the wake of the FTX saga. Bitcoin was also below the $17K mark, with bearish targets at $14.8K and $13.2K. It seems likely that the DOT will see more losses in November.

Read Polkadots [DOT] Price forecast 2022-2023

A recent article highlighted that a bullish order block has formed on the daily chart at $6.3. But since then this area has exploded under selling pressure and turned into a bearish breakout.

A retest of the previous bullish order block as a bearish breakout may provide selling opportunities

Source: DOT / USDT on TradingView

On November 2, Polkadot had a red day of trading on the charts. This was followed by a northward shift to $7.4. As this move shifted the structure in favor of the bulls at the time, it was a bullish order block. The same area was expected to see a positive reaction to the retest.

This did not happen. Instead, the price collapsed right through this area, pausing for a few hours at the $6.2 mark on November 9, before dropping to $5.34.

The Relative Strength Index (RSI) fought valiantly to stay above the neutral 50 level earlier this month but finally succumbed to selling pressure. Balance Volume (OBV) has also been in a downtrend since September. Attempts by buyers to reverse the trend in early November failed.

Further downside on the charts, a support level was seen at $4.71. It was last tested as a support level in December 2020 and could act as a profit target for the bears. This downtrend could be negated by the daily session near the downside breakout, at $6.53 or higher.

Development activity was high and NFT trading decreased

Polkadot turns the demand area into resistance, what will happen now for the price?

Source: feeling

Amidst all the carnage in the cryptocurrency markets, the developers behind Polkadot have put their craft to nonstop. This may be a positive sign for long-term investors. However, this does not mean that buyers can start buying DOT right away.

In terms of NFT deals, the number of deals and trading volume has been declining since July. Waves of power such as those in late September and late October were few and far between.

Traders looking to sell DOT can wait for a suitable entry near $6.3, while traders who are already short can look to take profits with the DOT approaching $4.7. The DOT could also have gone down, especially if Bitcoin decided to drop to $14k or below.

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