Polkadot: Why you need to watch out for DOT’s move to $4.6
In the past 48 hours, DOT registered a bounce close to 3% higher. Yet, the spot CVD has been in a downtrend during this time.
• Polkadot has a bearish structure across higher and lower timeframe charts.
• A move to the $4.4-$4.6 region was possible but would be an opportunity for short-sellers to re-enter the market.
Polkadot [DOT] saw a bullish market structure break on the lower timeframe a few days ago. However, the bounce lost momentum at $4.8 and has since fallen below the $4.3 support. This showed that the temporary respite from selling pressure was a ruse.
The momentum was bearish once more, and the drop below $4.3 was a sign of intent from the sellers. Where is the next higher timeframe support zone that the bulls can look to make a stand at?
On the 1-day chart, Polkadot stood at $4.28 at the time of writing. The $4.56 (dotted orange) highlighted a lower high from the 4-hour chart, which was beaten on Monday 28 August. However, the bulls were unable to sustain the move and the bears seized control at the $4.8 mark.The $4.27 level represented the low of the bullish order block on the 1-day chart.
On Friday, 1 September, DOT closed a daily session below it. This flipped the order block to a bearish breaker, and meant that short-selling opportunities could arise should DOT bounce toward the $4.4-$4.6 region.
The Fibonacci extension levels showed that sub-$4 prices were a strong possibility for Polkadot in Q4 2023. The 23.6%, 50%, and 61.8% extension levels lie at $3.894, $3.495 and $3.317 respectively. Given the downtrend on the 1-day chart and the bearish market structure, it was likely that DOT would fall toward the $3.5 and $3.3 levels in the coming months.