DOT Price (Polkadot) Reaches Critical Point, Is This a Trap or Just a Correction?
Polkadot (DOT) is currently experiencing a correction after facing resistance at the $7.5 level against the US Dollar. Traders are closely monitoring whether this is a temporary pause in the bullish trend or the potential beginning of a larger downward trend.
During the recent uptrend, DOT managed to break through several key resistance levels, including $6.75 and even reaching as high as $7.46. However, similar to other cryptocurrencies like Ethereum and Bitcoin, DOT is now retracing some of those gains.
Currently, DOT is still trading above the $7.00 zone and the 100 simple moving average (4 hours), which indicates that there is still potential for further upside. There is also a short-term expanding triangle forming, with resistance at $7.50 on the 4-hour chart of the DOT/USD pair.
If DOT manages to break above the $7.50 resistance level, it could trigger another strong rally, potentially pushing the price towards $8.00. The next significant hurdle would be near the $8.80 zone.
On the flip side, if DOT fails to sustain above the $7.25 support level, it might continue to slide downwards. In this scenario, the first key support is near $7.00, followed by the $6.75 level or the 50% Fib retracement level. Further losses could potentially lead to a test of the $6.50 level, and potentially even the $6.10 or $6.00 support zones.
The MACD indicator for the 4-hour chart of DOT/USD is currently showing a loss of momentum in the bearish zone, indicating potential downside pressure. The RSI indicator is also below the 50 level, further suggesting weakness in the short term.
It’s important to note that investing in cryptocurrency carries risks, and any decision should be based on thorough research and analysis. This article is for educational purposes only and does not constitute financial advice.