Polkadot suffered a drop of around -31% this summer of 2023. Let’s see the future prospects for the DOT price.
Polkadot (DOT) Status
After rejecting the $5.50 At the beginning of July 2023, the price of Polkadot continued its decline, thus marking a new low point compared to its all-time high. Currently, DOT is trading just above $4. It is below the 50 and 200 day moving average, both trending downward. This demonstrates the downward trend that the cryptocurrency has taken. From a Chartist perspective, Polkadot appears to form an inverted cup with handle. This pattern suggests a possible bearish continuation. The oscillators demonstrate still bearish momentum. However, it is interesting to highlight the formation of a bullish divergence on the latter. Once confirmed, this theoretically suggests the arrival of a trend reversal.
The current technical analysis was carried out in collaboration with Elie FT, a passionate investor and trader in the cryptocurrency market. Today trainer at Family Tradinga community of thousands of own-account traders active since 2017. You will find Lives, educational content and mutual assistance around the financial markets in a professional and warm atmosphere.
Focus on derivatives (DOT/USD)
While the price of DOT has been revised downwards, the open interest of the latter has paradoxically been revised upwards, despite significant liquidations of long positions. This demonstrates in a way a significant selling pressure on Polkadot.
These latter remarks can be confirmed by examining the CVD on DOT derivatives, which has fallen significantly. However, it is interesting to observe the same indicator in the spot market. Indeed, the spot CVD of Polkadot has been increasing since the beginning of September. This divergence suggests a potential reversal of the upward trend, which is rather comforting.
Hypotheses for the price of Polkadot (DOT)
. If the DOT price returns above the $4.3we could anticipate a bullish continuation up to the level of $4.5. The next resistance to consider at this point will be the psychological threshold of $5.
. If the DOT price fails to return above the 4.$3we could consider a return to $4. The next support to be considered at this stage would be around $3.9 – $3.7.
Conclusion
Polkadot is still in a downtrend. That being said, different factors point to the arrival of a potential bullish reversal. Obviously, nothing has been done yet. Consequently, it will be important to carefully observe the price reaction on the different identifiable levels to confirm or not the different hypotheses made. Beware of potential “fake out” and “market squeeze” in each situation. It should also be remembered that these scenarios are based mainly on technical analysis. The price of cryptocurrencies may change more or less quickly, depending on other more fundamental factors.
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