Polkadot: Why you should watch out for DOT’s move to $4.6

Posted: September 4, 2023

Disclaimer: The information presented does not constitute financial, investment, trading or other advice and is solely the opinion of the author.

• Polkadot has a bearish structure in higher and lower time frame charts.
• A move to the $4.4-$4.6 region was possible, but would be an opportunity for short sellers to re-enter the market.

Dot [DOT] saw a bullish market structure breaking on the lower time frame a few days ago. However, the uptick lost momentum at USD 4.8 and has since fallen below the USD 4.3 support. This revealed that the temporary break in selling pressure was a ruse.

Read Polka Dots [DOT] Price Forecast 2023-24

Momentum was once again bearish and the drop below $4.3 was a sign of intent from the sellers. Where is the next higher time frame support zone for the bulls to look to take a stand?

The breakout of the HTF’s bullish order block meant that sellers were in the driver’s seat

Source: DOT/USDT on TradingView

On the 1-day chart, Polkadot was trading at $4.28 at the time of writing. The $4.56 (dotted orange) marked a lower high on the 4-hour chart, which was beaten on Monday, August 28. However, the bulls were unable to sustain this move and the bears seized control at $4.8.

The USD 4.27 level represented the low point of the bullish order block on the 1-day chart. On Friday, September 1, DOT concluded a daily session below that. This turned the order block into a bearish breaker, and meant short-selling opportunities could emerge if DOT bounced towards the $4.4-$4.6 region.

The Fibonacci expansion levels showed that prices below $4 were a good opportunity for Polkadot in Q4 2023. The 23.6%, 50%, and 61.8% expansion levels are at $3,894, $3,495, and $3,317, respectively. Given the downtrend on the 1-day chart and the bearish market structure, it was likely that DOT would fall towards the $3.5 and $3.3 levels in the coming months.

Market Sentiment Was Bearish: Have Things Changed?

Source: Coinalysis

On August 31, when DOT moved from $4.45 to $4.26, Open Interest surged higher. This showed that short sellers entered the market in large numbers, implying an intense near-term bearish course.

How much are 1, 10 or 100 DOT worth today?

In the last 48 hours, DOT registered a bounce that was almost 3% higher. Still, the spot CVD was in a downward trend during this period.

It was evidence of continued selling pressure on the token and indicated the absence of strong buyers, meaning that Polkadot was likely to fall lower on the price chart.