Polkadot (DOT) Price Trades in Downtrend With Bulls Continually Losing Grip

Key Takeaways

• DOT is trading within a falling channel, forming what initially looked like a bullish flag but is now diverging from expectations.
• The CMF fell from 0.17 to 0.08, indicating fading bullish strength and rising bearish divergence on the Polkadot 4-hour chart.
• A sustained breakdown could drag Polkadot’s price toward $3.24, possibly under $3 in a highly bearish scenario.

Earlier in the month, Polkadot (DOT) price attempted to reach $6. But it failed after bears tugged the price back when it reached $5.60.

A few weeks later, DOT found itself stuck in a bearish pattern. As a result, the cryptocurrency’s price has been down 10% in the last seven days.

Market participants might want to know whether the altcoin will experience a quick rebound. In this analysis, CCN explains everything there is to know about the cryptocurrency’s price action and potential in the short term.

Polkadot Bullish Setup Cracks

Based on the 4-hour chart, Polkadot’s price is trading in a falling channel after hitting lower highs and lows. The image below shows that the descending channel has formed a bull flag, especially as it came shortly after the upswing to $5.60.

Amid this formation, CCN observed that the Chaikin Money Flow (CMF) has turned downwards. Over the weekend, the CMF rating was $0.17, indicating rising buying pressure.

But today, the same metric has dropped to $0.08, indicating that bulls are losing price control. This decline in CMF indicates a bearish divergence from the bull flag.

Hence, DOT’s price is likely to experience a lower value in the short term. In addition, the Awesome Oscillator (AO) reading has dropped to the negative region.

This decline implies bearish momentum. If this lingers without a move to the positive zone, then Polkadot’s price risks falling below $4.

DOT Price Analysis: Correction or Comeback

The daily chart also suggests that DOT is at a critical point. We examined how the price relates to the Exponential Moving Average (EMA) during this timeframe.

From the chart below, the 20 EMA (blue) has crossed over the 50 EMA (yellow). This position is called a golden cross, and is bullish.

However, it does not seem like this EMA position will push Polkadot’s price higher. This is because DOT has dropped below the 20 EMA and is on the verge of falling below the 50 EMA.

If the altcoin drops below the 50 EMA, a correction could follow. In that scenario, the Polkadot market value could drop to $3.24.

Should selling pressure increase, the price might fall below the $3 mark. On the contrary, if DOT’s price climbs above the 20 EMA and momentum turns bullish, this prediction might not pass.

If that were to happen, Polkadot’s price could rise to $5.22. In a highly bullish case, it could hit $6.44.