Since reaching its all-time high on Nov. 4, Polkadot (DOT) bears have been sitting in the driver’s seat as DOT descended between parallel lines heading south (yellow). The most recent drop pushed the alt below its six-month trendline support (now resistance).
A sustained close below the Point of Control (red) near $17.2 would increase the likelihood of further downfall. This fall would likely see a collision between the buyers and sellers in the $17-$14 range, before taking a trend move. At the time of writing, DOT was trading at $17, down 4.5% in the past 24 hours.
DOT daily chart
The final bearish phase (of its ATH) led the alt to lose more than 71% of its value, dropping to its 25-week low on January 24. As the Point of Control served as a strong buy zone, the DOT reversed and formed a bearish flag on the daily chart.
While the bearish flag dipped below the six-month support (now resistance), the current price was still not overextended against its 20-50 EMA. This increases the chance of high volatility in the coming days. Also, the alt reversed after the first retest of its trendline resistance, confirming the downtrend.
So a sustained close below the $17 zone would be a crucial confluence to reconfirm the DOT’s downtrend. In that case, the alt was looking at a likely retest of the $14 in the coming days. Keeping a close eye on the February 20 candlestick would be vital in determining the possibility of a bullish revival.
The RSI has struggled to find a close above the midline since mid-November, confirming the bearish edge. Now it was looking south toward the 32 mark after losing the 37 point.
To top it off, the Squeeze Momentum Indicator showed a gray dot on February 20. This reading involved a high volatility phase. Also, as the -DI looked north, DOT still refrained from revealing solid recovery signals.
DOT lost its vital 61.8% Fibonacci support coinciding with its six-month trendline resistance. This confirms the strength of the current downward trend. Retracements below the checkpoint would bottom near the $14 mark before setting a trend.
Still, an overall analysis of market sentiment becomes essential to complement the technical factors in order to make a profitable move.
This post Chance of high volatility next week? But DOT could defy the trend
was published first on https://ambcrypto.com/chances-of-high-volatility-in-the-coming-week-but-dot-could-defy-the-trend/