Can Polkadot (DOT) Reclaim $5 Under Market Pressure?
The price of Polkadot (DOT) fell more than 10 percent last week. Monday's market turmoil saw it trade below the $5 price level for the first time since November 2023. On that day, the altcoin even fell to $3.75 before recovering.
Currently trading at $4.59, DOT now faces a steep climb back above the $5 mark.
When Polkadot tries to redeem $5, he runs into a headwind.
DOT's key technical indicators reviewed on the one-day chart suggest that a break above the $5 price mark could make selling the push bullish.
As of this writing, the reading from the DOT's Directional Movement Index (DMI) shows the negative direction indicator (-DI) (red) resting above the positive direction indicator (+DI) (blue).
A property's DMI measures the strength and direction of a market trend. A downtrend is stronger when the +DI line is below the -DI line. This means that sellers have more control over the market than buyers.
The greater the distance between -DI and +DI, the steeper the rate of decline. In the case of DOT, the downward trend is significant as the DI line is 40.69, while the +DI line is 6.20.
Additionally, DOT's Average Directional Index (ADX) (yellow) is higher at 43.37. In general, when the asset's ADX increases and the -DI is above the +DI, it indicates that the downtrend is strong and likely to continue.
At press time, DOT is trading below the 20-day moving average (EMA) (yellow) and below the 50-day minor moving average (SMA) (blue).
The asset's 20-day EMA is a short-term moving average that reacts quickly to price changes. It reflects the average closing price of the property over the last 20 days. On the other hand, the 50-day SMA is a long-term moving average that measures the average closing price over the past 50 days.
Read more: What is Polkadot (DOT)?
When an asset trades below these key moving averages, it is a bearish sign. This means that short-term and medium-term traders are selling the asset, which will lead to continuous downward pressure.
DOT Price Forecast: A rally above these averages is important.
DOT's 20-day EMA and 50-day SMA can act as resistance levels. If it tries to rally above them, it may face selling pressure around these averages and continue its downtrend. If that happens, DOT's price could drop to the nine-month low of $3.59 it traded on Monday.
Read More: Polkadot (DOT) Price Prediction 2024/2025/2030
However, if the coin resumes growth and breaks above these moving averages, the price target will be $6.76.
Disclaimer
In accordance with Trust Project guidelines, this price analysis article is for informational purposes only and should not be construed as financial or investment advice. BeInCrypto is committed to accurate, unbiased reporting, but market conditions are subject to change without notice. Always do your own research and consult with a professional before making any financial decisions. Please note that our terms and conditions, privacy policy and disclaimer have been updated.
