Polkadot (DOT) continues its downward trajectory as sellers remain in control, with the price dropping towards the support at $6.40.
Polkadot (DOT) slipped below the crucial $7 mark on Friday and continued to drop over the weekend, ending Sunday at $6.61.
Can Polkadot (DOT) Remain Above $6.40
Over the past few days, Polkadot remained in a defined range, indicating a balance between buyers and sellers. The price was at its highest level of the ongoing month on May 2, when it reached $7.27. However, since then, it has been on a steady downward trajectory, with sellers breaching crucial support levels along the way. Polkadot (DOT) slipped below the 200-day SMA on Monday (May 6), dropping to $7.12. At this point, the 20-day SMA, present at the $7 mark, was acting as a level of support.
The price dropped to $6.99 on Tuesday (May 7), but with the 20-day SMA acting as support, it was able to consolidate, rising to $7.04 by May 9. However, bearish sentiment returned to the market on May 10, as sellers pushed DOT down by 4.43%. This saw the price fall below the crucial $7 mark and the 20-day SMA. The weekend saw DOT remain in the red, dropping by 1.11% on Saturday and 0.71% on Sunday to settle at $6.61. The current session is seeing considerable volatility, with DOT reaching a low of $6.43. However, it has since recovered and is currently trading at $6.59, down by 0.36%.
Can Polkadot (DOT) Recover From Support Level
Most analysts had expected a downturn in the near term, targeting $6.40, where Polkadot (DOT) still has strong support. As seen in the price chart, sellers pushed DOT below $7, but so far, it has remained above its support level. So, where does DOT go from here? If sellers are able to maintain control, DOT will continue to decline toward $6.40, and should this level of support be broken, it will drop to $6.
Any significant price movement requires DOT to break out from the current range ($6.40 - $7). If the price can recover, it could test the resistance at $7. The next target would be the 200-day SMA at $7.30. However, we could see continued sideways consolidation at DOT’s current level before any major recovery. The MACD and the Parabolic SAR are both currently bullish, indicating we could see DOT recover in the near term. However, should sellers push DOT below $6.40, we could see both flip to bearish.
While open interest registered a sharp decline, it saw a small but steady recovery, as shown in the chart below. Whether this steady increase results in heightened demand and bullish momentum remains to be seen.
Polkadot Working To Raise Network Awareness
Despite the recent downturn in the Polkadot (DOT) price, the network has been actively collaborating with stakeholders to raise awareness about the network. However, it remains to be seen if these efforts bear positive results in the long run. The Polkadot network also announced the implementation of Asynchronous Backing, a crucial upgrade that impacts how parachain blocks are validated. Implementing Asynchronous Backing would enable a two-fold acceleration in block production and a 2x to 5x increase in extrinsic per block, streamlining the utilization of parachain blocks and an increase in blockspace availability.
“Async Backing boosts throughput by 8x, without sacrificing security, paving the way for supporting Web3 applications across verticals such as gaming and DeFi. It brings Web2 scale into the reach of Web3, which is crucial for large-scale platforms like Mythical Games.”
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.
