Polkadot: Sellers threaten to crack $4
Journalist
Posted:
Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- DOT formed a new 2023 low of $3.908 at press time.
- The long-term price trend was firmly bearish.
Sellers have overwhelmed Polkadot’s [DOT] in Q3, leading to a new 2023 low of $3.908. Unfortunately, Bitcoin’s [BTC] drop below $27k could encourage sellers to extend gains beyond $4.
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What’s next for DOT’s price action?
Source: DOT/USDT on TradingView
Sellers pushed DOT’s value below the January 2023 levels and weekly bullish order block of $4.22 – $4.58 (red). In the second half of September, the red zone was flipped to resistance, giving sellers more leverage to lower DOT’s price.
The daily timeframe market structure was bearish at press time, further cementing the sellers’ position. In addition, the CMF faltered at zero while the RSI was stuck in the low range. It underscored the lack of substantial capital inflows and weak buying pressure.
So, sellers could depreciate DOT value further. The weekly bearish OB of $4.22 – $4.58 (red) and $4.00 could be re-entry positions for extra shorting opportunities if BTC retreats further. In such an extremely bearish scenario, the take-profit targets could be $4.0, $3.9, and $3.6.
Conversely, DOT could show bullish intent if price action closes above the weekly bullish OB ($4.22 – $4.58).
Mixed signals in the Futures market
Source: Coinalyze
Some key indicators showed mixed signals in the Futures market. For example, the fluctuating funding rates showed sellers could gain extra leverage. In addition, the Accumulative Swing Index (ASI) was negative, indicating the long-term price trend was firmly bearish.
How much are 1,10,100 OPs worth today?
But the Open Interest rates surged and could suggest demand improved – A bullish bias. However, the surge happened as prices declined, meaning more contracts were opened to cover short positions.
So, BTC’s movement up or below $26.4k will determine DOT’s next price action. Hence, tracking BTC price action could help with better-optimized trade set-ups.
