Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.
- The formation of the short-term range at support indicated bearish strength.
- Bullish speculators have also lost steam in recent days, pointing to further losses for DOT.
Dot [DOT] traded within a range stretching from $5.15 to $7 since March. On April 19, as Bitcoin fell from $30.4k to $28.8k, Polkadot’s one-day market structure also turned bearish. This was due to a session ending below the $6.55 mark.
Read Polka Dots [DOT] Price Forecast 2023-24
For the past month, DOT’s bias has been bearish on the higher time frames. In addition, the price formed yet another short-term range within a support zone in the $5.4 region. This indicated weak bulls. Will Polkadot prices fall further and lose the $5.15 support?
The lack of response from support was a concern for buyers
Source: DOT/USDT on TradingView
An analysis of the 12-hour chart showed that the $5.15-$5.45 area represented a bullish order block. In addition, they coincided with the two-month lows (yellow). This staked out the $5.15 territory as strong support.
But when this block of orders was tested as support on May 8, it received a lukewarm response from buyers. The price bounced to $5.53 before coming under heavy selling pressure. The bears managed to keep DOT prices below $5.5 for the past two weeks.
The RSI fluctuated above and below the neutral 50 without showing a clear trend. This finding was confirmed by the Directional Movement Index. The ADX (yellow) was below zero, indicating no significant trend. Both findings support the idea of a two-week range building around $5.2.
Therefore, DOT traders can look for short positions in the $5.4-$5.5 area. They can also look to short Polkadot in case prices dip below $5 and retest the region as resistance.
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The past 48 hours have marked discouraged bulls
Source: Coin analysis
In the past week, the price fluctuated between $5.25 and $5.44. The outstanding interest was flat during this period, with increases corresponding to a small increase in prices and a decrease alongside a decrease in prices.
Still, OI is down nearly $8 million over the past two days, even though DOT prices hovered just above $5.25. This suggested that short-term sentiment was strongly bearish. Putting the price action and sentiment together, it was clear that the sellers had the upper hand as of late.