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Polkadot (DOT) has climbed back above $4 after dipping below the crucial support level on Friday when sellers dragged the price to a low of $3.82.
DOT has struggled in recent months, losing the $5 price level at the beginning of August and dipping to its multi-year support level of $3.62. It recovered from this low, charting a steady path back towards $5. By August 24, DOT reached a high of $5.11 before turning bearish and slipping below $4 during the ongoing week.
Polkadot (DOT) Continues To Lose Momentum
Polkadot (DOT) has registered a drastic drop in its market cap as selling pressure continues to weigh its price down. The altcoin is trading below the 20, 50, and 200-day SMAs as buyers struggle to keep it above $4. DOT ended the previous week in the red with a drop of 4.46%, which pushed the price down to $4.07. The current week began with an increase of 3.44% as DOT rose to $4.21. However, with demand drying up at upper levels, DOT fell back in the red on Tuesday, falling by 3.33% to $4.07. On Wednesday, sellers attempted to overwhelm the $4 support level, pushing DOT to a low of $3.88. Strong lower-level demand allowed DOT to recover and push back above $4 despite the selling pressure. DOT eventually registered an increase of 0.98% to settle at $4.11.
Source: TradingView
Sellers once again assumed control on Thursday as DOT dropped by 2.19% to $4.02. Selling pressure intensified on Friday as the price plunged below $4, dropping to a low of $3.82. Buyers countered the selling pressure to some extent as DOT ended the day at $3.96, closing below the crucial $4 level. The current session sees DOT up by just over 2% and having reclaimed the $4 level. Currently, DOT is trading at $4.04.
What Next For Polkadot (DOT)?
Let’s look at potential future moves for Polkadot (DOT). DOT has strong support at $4, which has been tested twice this week, with buyers successfully defending it both times. If this level does get breached, DOT’s multi-year support of $3.62 will come into focus. The bulls will defend this level ferociously to prevent any further downside. Any breach of this level would indicate a significant spike in bearish sentiment around DOT.
On the other hand, with DOT consolidating above $4, if buyers can build momentum, their immediate target will be a push above the 20-day SMA and $4.50. While unlikely at the moment, a break above this level could signal a potential push towards $5. Should DOT get rejected from this level, we could see a drop back to $4.
Disclaimer: This article is provided for informational purposes only. It is not offered or intended to be used as legal, tax, investment, financial, or other advice.
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