After sliding by 27% to $6 in the last 30 days, Polkadot saw a recovery overnight and trades calmly above this price level. It is currently taking a break as it retests a crucial level. Likely to resume bleeding shortly.
From around $9.3 at the top, DOT saw a roller coaster move in the past weeks and later formed a head and shoulder – H&S pattern above the $6.5 support level on the daily chart.
This support – where the neckline sits – cracked down on Monday and the price slipped to a low of $5.97 yesterday’s afternoon. But it managed to close around the $6 level after sharply rejecting the low level.
Following an overnight recovery, the price is relatively trading calm around the $6.3 level at the moment. This setup looks more like a natural break and retest pattern of the H&S neckline, which seems healthy for the next bearish impulsive movement.
We can expect more sell-offs to take place in the coming days. Following a typical breakdown of this H&S pattern along with the potential price range, the price can still drop to as low as $4 before bouncing back.
The only condition to invalidate this pattern may come through market speculations and perhaps price behaviours in the future. But with the current setup, more drawdown should be expected.
DOT’s Key Levels To Watch
In the meantime, we can expect a retest at the $6.5 resistance level that recently broke as support. Above this resistance lies the $7, $7.85 and $8.58 levels.
Once the price starts to drop again, the recent low would be the first level of interest for the bears, which is close to the $5.9 support, then followed by $4.83. The lower support level to watch is $4.
Key Resistance Levels: $7, $7.85, $8.58
Key Support Levels: $5.9, $4.83, $4
- Spot Price: $6.46
- Trend: Bearish
- Volatility: High
Disclosure: This is not trading or investment advice. Always do your research before buying any cryptocurrency or investing in any services.
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