Polkadot (DOT) has experienced a gradual decline in its price trajectory since the beginning of the year, marked by a pattern of lower highs and lower lows. Additionally, the cryptocurrency has faced resistance from a descending trendline, limiting its upward potential.
This trend coincides with a broader market decline in the realm of altcoins. However, there is potential for a shift in the near future, as DOT appears to be consolidating, potentially setting the stage for a recovery rally.
Polkadot (DOT) encountered a significant rejection within the three-day supply zone, spanning from $4.07 to $4.26. This rejection caused DOT to seek support at $3.67, and it currently stands at a crucial crossroads, torn between the potential for further decline and a rebound towards the anticipated level of $5.000.
Presently, the prevailing odds seem to favor the downside, as the Relative Strength Index (RSI) has dropped below the 30 level, indicating that DOT is oversold. An RSI below 30 often suggests an oversold condition and the potential for a price rebound. Consequently, there may be a pending pullback or correction in the offing.
Unless there is a surge in bullish momentum, the ongoing decline may persist, potentially pushing Polkadot's price below the immediate support at $3.67. If this support is decisively breached and closed below, it could clear the path for further decline, potentially leading DOT to test the psychologically significant level of $3.15
Photo by GuerrillaBuzz on Unsplash