Dot Price On the Verge of Breakout

Polkadot price is stuck in a consolidation zone ranging between $5.52 and $5.23 after experiencing rejection from $6.94. The price has been consolidating since the 10th of May. Polkadot initiated a bullish rally during the start of 2023, rising from the low of $4.275 and forming an annual high at the $7.90 level on 19 February. This move caused a rise of approximately 85% in the price. 

Polkadot is on a correction course. The cryptocurrency price fell straight to $5.36 and received a rejection of $5.15. Dot price again gained bullish momentum in the hope of retesting and breaking the annual high but bears did allow it to rise above $7 and the move was halted. After which the dot price melted down to the $5.23 level and started to consolidate.

The current candle has shattered the support level but for confirmation, traders should wait for the candle to close. If the current candle is able to close below the support, the next support level for the Dot price resides at $4.60 and the drop will cause a loss of roughly 12% in the price. 

Polkadot Shows Decline in Revenue  

The token activity has soared for Polkadot and had taken the fourth spot leaving behind strong contenders like Solana, Filecoin, and Litecoin. This shows the growing adoption and prominence of the Polkadot Network. The network has distributed more than $11.4 Million of token incentives, highlighting network commitment to reward participants. 

Even though Polkadot has incentivized its users, there is a significant decline of 69.9% in daily activity over the past month. The revenue has also taken a hit and has dropped by 25% over the past month. The trading volume has dropped from 250 Million to 90 Million due to prevailing negative sentiment around the token. 

Will Dot Price Melt to the $4.60 level?

Dot price trades below 20,50,100 and 200-day EMA indicating bearish momentum in the price. Chaikin money flow score is 0.03 declining from 0.20 indicating increasing weakness in the market. RSI trades at 40.08 indicating bearish momentum in the price. 

The Bollinger bands have contracted indicating low volatility in the market and the Dot price has arrived at the lower band of Bollinger but has not shown any signs of pullback. The long/short ratio is 0.83 with 45.41% longs and 55.59% shorts indicating bearish sentiment prevailing in the last 24 hours. 

Conclusion

The market structure and price action of Polkadot is bearish and the current candle has broken the support. Traders should wait for the candle to close before looking for bids as the Dot price might re-enter the consolidation zone. 

Technical levels

Major support: $4.60 and $4.30 

Major resistance: $5.52 and $5.86

Disclaimer

The views and opinions stated by the author, or any people named in this article about Polkadot Price, are for informational purposes only. They do not establish financial, investment, or other advice. Investing in or trading crypto assets comes with a risk of financial loss.

Nancy J. Allen is a crypto enthusiast and believes that cryptocurrencies inspire people to be their own banks and step aside from traditional monetary exchange systems. She is also intrigued by blockchain technology and its functioning.

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