Polkadot’s price is experiencing considerable selling pressure, causing a significant decline below the crucial $6 support zone. Current price action reveals no signs of recovery, suggesting the downtrend might persist in the short term.
What Does the Daily Chart Indicate?
The daily chart reflects a marked increase in selling momentum, pushing Polkadot’s price below the $6 support level, breaking out of a multi-month triangle formation. This breach could instigate long liquidation in the futures market. Although a slight pullback to the broken $6 level might occur, if it confirms the break, it will reinforce the bearish outlook.
How is the 4-Hour Chart Shaping Up?
On the 4-hour chart, Polkadot’s price displays a clear pattern of lower lows and lower highs, highlighting a pronounced downtrend and seller dominance. The cryptocurrency is retreating within a descending price channel, underscoring continued selling interest among market participants. The price has approached the significant support area around $5.5, which has consistently served as support.
If the selling pressure intensifies and breaches the $5.5 support, Polkadot might experience further declines targeting the critical $5 zone. Alternatively, there might be a temporary consolidation around this support, with movements confined between the $5.5 support and the upper boundary of the descending channel.
Key Insights for Investors
Polkadot has been in a strong downtrend, ultimately falling below the $6 threshold. Understanding the primary drivers of this downward movement is crucial for investors to gauge market sentiment and predict future price actions. The following points are essential:
- Significant liquidity exists above the $7.3 level, indicating potential buy-stop orders.
- Selling activities and aggressive short positions are prominent at higher price levels.
- Periods of consolidation and potential bullish pullbacks are likely as sellers realize profits.
The attached chart highlights potential liquidation levels, offering valuable insights into medium-term focus areas for smart money.
In conclusion, Polkadot’s current price action suggests continued selling pressure and potential further declines. However, understanding market drivers and support levels can help investors navigate this challenging environment.