Polkadot: Sellers crack $5.23 support — can bears sustain momentum

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

• Sellers take advantage of bearish market conditions to crack this key support level.
• Bearish momentum was evident in DOT’s open contracts.

Polkadot [DOT] sellers rode on the predominant bearish sentiment in the market to break below the key $5.23 support level. Buyers and sellers had been caught in a range formation between the bearish order block and the key support level.

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Read Polkadot’s [DOT] Price Prediction 2023-24

Bitcoin’s [BTC] dip under the $29k price level gave bears the opportunity to flip the $5.23 level to resistance. Will this prompt a reaction from the bulls?

Bulls defeated by the inability to push past bearish order block

The stiff resistance put up by bears at the bearish order block (OB) between $5.6 to $5.9 severely hampered the bullish rebound from the June low of $4.24. The most recent price rejection at the bearish OB saw DOT dip to the key support level.

With the price action at the support level hinting at discouraged buyers, bears seized the opportunity to break below the key support over the past 48 hours.

The sharp dip of the Relative Strength Index (RSI) over the past three days highlighted the waning buying pressure. Similarly, the Moving Average Convergence Divergence (MACD) remained under the zero mark after posting a bearish crossover.

A little glimmer of hope lies for bulls at the $4.8 to $5 price zone. However, if bears push past this hurdle, they can extend their gains to the lows of $4.2 to $4.5.

Futures market highlighted growing sellers’ advantage

Source: Coinglass

How much are 1,10,100 DOTs worth today?

The bearish momentum was highlighted by shorts holding onto a greater share of the open contracts for DOT. A look at the exchange long/short data from Coinglass on the four-hour timeframe revealed a 52.5% swing in favor of sellers.

This suggested a likelihood of bears clearing the $5 hurdle with the price action titled in favor of sellers.