Bearish Trend Breaks Support, Await Signs of Reversal

2023년 6월 11일

Over the past month, the price of DOT (Polkadot's currency) has faced considerable downward pressure, moving between the support level of $5.15 and the resistance level of $5.60. However, the price recently broke below the lower boundary of Polkadot's currency range channel, indicating a bearish trend. This selling pressure was so strong that it briefly dipped below the price floor of $4.23, which had been established at the end of 2022.

Interestingly, the price of Polkadot found significant monthly support within the range of $4.24 to $3.98 and responded positively to this support level. This suggests that there is a potential for a trend reversal and upward movement in price if we observe encouraging signs of a positive reaction and a change in the trend on the daily and four-hour time frames within this support range. These signs could indicate a reduction in selling pressure and a renewed demand for DOT.

However, at present, we do not see these favorable indications on the mentioned time frames. It may be necessary to wait for signs of a trend change in the short-term, particularly for lower time frame trades. For example, on the 15-minute time frame, if the resistance level between $4.53 and $4.57 is broken, it could serve as a signal for a short-term trend reversal. It is important to closely monitor how the market responds to this monthly support level, as a strong positive reaction could result in the price of Polkadot fluctuating within the range of $4 to $5 for a certain period of time.

Considering the current market conditions, it is crucial to remain cautious and wait for confirmation of a positive trend change before making any significant trading decisions. The RSI (Relative Strength Index) value of 34 on the 4-hour timeframe suggests that the market is in a slightly oversold condition, but further analysis and confirmation are necessary to determine the direction of the price movement.