Polkadot has been in steep decline over the past week as the broader market extended losses at press time.
Bitcoin plummeted to $28,000 and posted a 7% loss in the last 24 hours. All major altcoins have followed the same path posting losses on the daily chart.
Polkadot was trading on a downtrend line, although DOT tried to rally on the charts. The recovery may stall if buyers do not return to the market.
The altcoin price was trading near its immediate support at $8.04.
DOT was last seen trading around this price in July 2021. Over the past four months, Polkadot has shown range-bound rallies.
The DOT price was between $24 and $16 for the last 17 weeks. Although Polkadot staged a renaissance, it is too early to conclude whether the currency will continue to move north.
Polka Dot Price Analysis: One-Day Chart
Polkadot was priced at $10.64 on the one-day chart | Source: DOTUSD on TradingView
Polkadot was trading at $10.64 at the time of writing. In the last 24 hours, DOT lost more than 12% and last week, the currency lost close to 30% of its market value.
The downtrend line represents a downtrend, even though the coin was attempting to break above the immediate resistance line at $10.80.
Moving above the $10.80 price level, the coin could target $13.22. In order to invalidate the bearish thesis, the coin must trade above the $14 price level.
The coin showed a series of bearish engulfing candlesticks (green arrow) on the one-day chart.
Bearish engulfing candles mark the start of bearish price action and the continuation of it.
In the event of a price reversal, if the coin manages to sustain above the $13.22 price level, then the other two resistances for DOT are located at $16.06 and $17.46, respectively.
The trading volume of the coin was seen in the green. This meant that the coin was showing a change in price direction.
Polkadot recorded a drop in buying pressure on the one-day chart | Source: DOTUSD on TradingView
Polkadot has been oversold in recent days, however, the coin has started to see an increase in buying strength.
The Relative Strength Index saw a spike on the one-day chart. The RSI moved above the oversold zone as buyers started to enter the market.
Buying pressure remained low in the market as the price of the coin was still driven by sellers in the market, despite the rally. The Directional Movement Index represents the price momentum in the market.
The DMI was negative on the chart as the -DI was above the +DI line, signifying bearish price action.
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Polkadot indicated bearish price action on the one-day chart | Source: DOTUSD on TradingView
Polkadot was trying to rally on his chart because the indicators have been reflecting that price action. Chaikin Money Flow portrays capital inflows and outflows.
On the one-day chart, Chaikin Money Flow was seen to post a rebound pointing towards an increase in capital inflows over outflows.
Awesome Oscillator stands for market price momentum. The AO continued to show red histograms below the midline, which meant that Polkadot was still in a negative price direction.
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This post Polkadot shows bearish engulfing candlestick; suggests a further downtrend
was published first on https://www.newsbtc.com/news/polkadot-displayed-bearish-engulfing-candlestick-suggests-further-downtrend/