- Polkadot (DOT) could drop to $4,376.
- A rise above $4,695 will invalidate expectations.
Polkadot (DOT) has been in a downtrend since mid-August. From a mid-August high of $9.6, it has fallen to $4.5 at press time. This is a 50% drop in value, and it looks like it might break another support level.
DOT has been trading sideways for the past 5 days, ranging between $4,695 and $4,376, but it could drop below this range if the $4,376 support does not hold.
Read Polkadot (DOT) Price Prediction 2023-24
Support at $4,486: Can it hold?
Polkadot’s downward trend since mid-August has formed a multi-month downward channel. It has broken many support levels. Depending on the technical indicators, it might break another one before the Christmas holidays.
In particular, the RSI recovered slightly from the oversold territory but moved sideways. This indicated an increase in buying pressure, but the sellers offered equal resistance, resulting in a neutral market. However, the RSI was at 32, deep in the lower band, suggesting that sellers still have the upper hand.
Balance Day Volume (OBV) has also been declining steadily since November. Therefore, DOT may continue to trade within or fall under the existing side structure. If the sellers get the upper hand, the price could break the current support at $4,486 and reach $4,376.
Such a downward move could help investors sell higher and buy back lower when DOT reaches $4,376. However, this opportunity comes with an unattractive risk ratio (RR).
How do Many Polkadot (DOTS) Can you get 1 dollar?
A break above the upper boundary of the trading range at $4,695 will invalidate the bearish bias above. However, the DOT bulls will need to overcome the immediate bearish order block at $4,602 to break above the upper bound.
An upward move would allow DOT to focus on the EMA bar level at $4923.
Investors’ outlook remained bearish despite the recent increase in development activity
Weighted sentiment at the DOT remained negative for most of December. At the time of publication, it has slipped deeper into negative territory. This indicates that investors remain very pessimistic about the asset.
Interestingly, the steady increase in development activity only pushed the DOT price higher from December 13-15, when sentiment improved slightly. Can the recent surge in negative sentiment and increased development activity offset the positive outlook for the DOT rate?