Polkadot (DOT) is currently facing a crucial level of resistance, raising concerns among traders about the potential for a sharp drop in price. If DOT fails to maintain its position above $6.00, it may experience further declines.
Currently, DOT is exhibiting bearish indications, as it struggles below the $8.80 and $8.00 levels against the US Dollar. Additionally, the price is trading below the $7.20 zone and the 100 simple moving average (4 hours). On the 4-hour chart of the DOT/USD pair, a significant bearish trend line has formed with resistance at $6.50.
Following a continuous climb, DOT encountered resistance near the $7.60 zone, leading to a recent decline below the $7.00 level, similar to Ethereum and Bitcoin. The coin dipped below the $6.20 support zone, reaching a low of around $6.03. Despite a slight recovery to above $6.35 and the 23.6% Fib retracement level, the price is still trading below the $7.00 zone and the 100 simple moving average (4 hours).
If DOT fails to surpass $7.00 and trigger a fresh increase, it is likely to face further downside pressure. The immediate support lies at the $6.00 level, followed by a major support level near $5.65. Additional losses may push the price toward $5.00, with the possibility of a move toward the $4.20 support zone or even the trend line.
On the upside, if DOT manages to break above $7.00, it could pave the way for another strong rally, potentially leading to a surge toward $8.20 in the short term. The next substantial resistance level can be found around the $10.00 zone.
As for the technical indicators, the 4-hour MACD for DOT/USD is showing a loss of momentum in the bearish zone. The 4-hour RSI (Relative Strength Index) has dipped below the 50 level, supporting the bearish sentiment.
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