Polkadot price (DOT) slides 7.0% on the day to hit a weekly low near $2.04 early Thursday morning in New York.
In doing so, the altcoin extends the mid-week reversal from an eight-month-old previous support line, forming part of the “Falling Wedge” bullish chart pattern.
Apart from the DOT’s sustained trading beneath a multi-month resistance line, bearish signals from the 14-day Relative Strength Index (RSI) and the Moving Average Convergence and Divergence (MACD) momentum indicators also support sellers.
Additionally, upbeat trading volume also validates the quote’s latest weakness, even as the market capitalization (market cap) speedily approaches the monthly low. According to Santiment, Polkadot’s daily trading volume remains near the weekly high hit on Tuesday, close to $243.96 million, while the market cap drops to $3.36 billion as we write.
Still, the key support near $1.90 becomes crucial to determine further weakness in the Polkadot price.
Let’s dig into the details!
Polkadot Price: Daily Chart Suggests Limited Downside Room
Polkadot’s failure to offer a daily close beyond a descending support-turned-resistance from April attracts the sellers within a four-month-old “Falling Wedge” bearish chart pattern, currently between $1.90 and $2.61.
Also validating the downside bias are the sluggish MACD signals (white histograms and the negative signal lines), as well as the RSI’s struggle to defend recovery from the 30.00 oversold territory.
This suggests the DOT’s another attempt to break the $1.90 key support. However, the nearly oversold RSI might stop the bears there.
In a case where the Polkadot price breaks the $1.90 support on a daily closing basis, it becomes vulnerable to slump toward the August 2020 low of $1.42 and October’s yearly low, which is also the DOT’s record low, near $0.97.
On the contrary, the aforementioned previous support line near $2.40 guards the DOT’s immediate upside ahead of the stated bullish chart pattern’s top, surrounding $2.61. It’s worth noting that the 50-day Exponential Moving Average (EMA) adds strength to the $2.61 resistance.
Should Polkadot price offer a daily closing beyond $2.61, it confirms a bullish chart pattern with the theoretical target of $5.54.
However, the 200-day EMA of $3.50, the $4.00, and the $5.00 thresholds could offer intermediate halts during the quote’s rise between $2.61 and $5.54.
Polkadot Price: Four-Hour Chart Highlights Bearish Bias
Polkadot’s four-hour chart appears to be more bearish than the daily formation as the MACD signals are clearly bearish (with red histograms), and the RSI is also pulling from the 70.00 overbought territory while also having a space before it hits the 30.00 oversold limit.
Notably, a downside break of an ascending support line from December 01, now immediate resistance near $2.10, also adds strength to the downside bias surrounding the DOT.
That said, Polkadot price currently aims for the monthly low of $1.97 before the 23.6% Fibonacci retracement of its September-October downturn, close to the $1.90 support.
Meanwhile, the DOT’s weakness past $1.90 key support highlights the deeper levels discussed on the daily chart.
Alternatively, an upside break of $2.10, immediate resistance, previous support line, could extend the corrective bounce toward a convergence of the 200-bar EMA and 38.2% Fibonacci retracement level, near $2.45-$2.47.
Beyond that, the 50% and 61.8% Fibonacci ratios, close to $2.94 and $3.40, as well as the daily chart’s higher levels, could attract the Polkadot buyers.
