Polkadot Faces Critical Test: Can DOT Hold Above $4 Amid Bear Cycle?
thecryptobasic.com + 1 more 28 August 2024 09:27, UTC As the Polkadot bear cycle intensifies, bullish efforts within a falling channel are increasingly challenged by the breakdown of critical support levels. Can DOT maintain its position above $4?
Today, the crypto market experienced a sharp downturn as Bitcoin fell below $60K. With growing selling pressure across the market, altcoins are struggling to hold their ground at key support levels. Will Polkadot’s support withstand the bearish onslaught?
Bearish Intent Grows in a Falling Channel
With a falling channel in the daily chart, Polkadot has witnessed a massive crash of 63% in the last five months. The bearish trend breaks below the $5 psychological mark and is continuously testing the support trendline.
Currently, the Polkadot downfall has formed four consecutive bearish candles on the daily chart, accounting for a 13.70% drop. Further, the recent bear cycle in the DOT price action has formed a double-bottom pattern with a neckline at $4.20.
In the 4-hour chart, Polkadot shows a bullish trendline that fails to absorb the incoming supply, resulting in a breakdown event.
The 4-hour price trend reveals a bearish ABCD pattern, with the trendline serving as the neckline. Amid a series of bearish candles, Polkadot has fallen below the $4.50 level and is currently trading at $4.336.
The VI lines in the DMI indicator show an increasing bearish gap as the ADX line surges. Additionally, the MACD lines remain in bearish alignment, indicating growing supply pressure. Consequently, the momentum indicators reflect the broader market sentiment, which is currently dictating Polkadot’s price trend.
Will The Fibonacci Levels Hold Polkadot?
Based on the Fibonacci levels, the recent decline has breached the 61.80% level at $4.340. However, buyers have managed to initiate a bullish reversal before testing the 78.60% level at $4.143.
Therefore, the bulls are anticipated to stage a potential comeback in Polkadot’s price before it reaches the $4 psychological mark. The Polkadot bear cycle may find bullish support at the $4.143 and $3.891 levels.
