The Polkadot (DOT) price failed to get past the 20-day SMA, which was a key resistance level and has dropped back below $7.
DOT had seen considerable bullish momentum, with traders hopeful the price could break past the 2-day SMA and go above $8. However, in the past two sessions, sellers have exerted influence and pushed the price down.
Polkadot (DOT) Back Below $7
DOT has been oscillating between the 200-day SMA at $7, which is acting as support, and the 20-day SMA, which is acting as a key resistance level for most of the ongoing week. The price also has another level of support at around the $6.40 price mark. The price stayed between this level of support and the 200-day SMA for all of last week, with the latter acting as resistance. DOT broke out above the 200-day SMA only on Saturday, when it registered an increase of 8.38% and settled above $7, at $7.24.
Sunday saw a marginal drop, but with the 200-day SMA now acting as support, DOT could stay above $7 and settle at $7.14. With the 200-day SMA as support, DOT faced several critical resistance levels ahead, which cast some doubt on the sustainability of any bullish movement experienced by the cryptocurrency. Currently, the DOT price is oscillating between the 200-day SMA and the 20-day SMA and has been for all of this week.
Monday saw the price register an increase of 4.62%, allowing DOT to settle at $7.47. However, despite considerable upward momentum over the weekend and on Monday, DOT could not move past the 20-day SMA, with sellers pushing the price down by almost 3% to $7.25. Wednesday saw a highly volatile session as DOT registered a considerable increase initially, with buyers pushing the price higher, allowing it to reach a high of $7.49. However, sellers were able to regain control of the session, pushing DOT back below the 20-day SMA. In fact, DOT registered a drop of 4.55% on Wednesday, dropping below the $7 mark to settle at $6.92.
Current Scenario
So, what does the current session hold for Polkadot? DOT is close to its support level of $7 and the 200-day SMA, as seen in the price chart above. The price is currently up by 0.72% as buyers enter the market at this price level. As mentioned earlier, DOT is sandwiched between the 200-day SMA which is acting as support, and the 20-day SMA. Both these levels are crucial reference points for DOT in the near term.
Currently, buyers and sellers are struggling to take control of the session. If bearish momentum persists, we could see DOT drop below the $7 mark and the 2000-day SMA. In such a situation, the price could drop to its second support level of $6.40, as shown in the chart below. If buyers are able to consolidate and take control of the session, DOT could test the resistance at the 20-day SMA once again. DOT must break past the 20-day SMA for any significant upward price momentum. If it does so, we could see DOT test the $8 level.
The indicators show that the MACD is still bullish, indicating that DOT could recover from its current level. Whether the recovery is enough for it to test the 20-day SMA once again remains to be seen. The Relative Strength Index (RSI) is currently at the lower end of the neutral zone. Its proximity to the oversold area indicates we could see buyers enter the market at DOT’s current price level.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
