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Disclaimer: The information presented does not constitute financial, investment, trading, or other types of advice and is solely the writer’s opinion.
- Massive selling pressure kept DOT firmly under $4.
- An influx of new short positions could result in another year low for DOT.
Polkadot’s [DOT] bullish reversal faltered at the $4 price zone, as the selling pressure produced a quick retest of the $3.6 support level.
Read Polkadot’s [DOT] Price Prediction 2023-24
An earlier price analysis by AMBCrypto projected that bulls could go on a sustained bull run if they were able to clear the $4 psychological level. However, the price rejection at the psychological price zone could extend DOT’s heavily bearish price action.
Sellers maintained dominance over DOT’s price action
The overwhelming control of sellers on DOT’s price action has been evident since mid-July. With multiple support levels succumbing to the selling pressure, DOT buyers have registered massive losses in the spot market.
After DOT sunk to a new low of $3.6, buyers rallied between 13 October to 16 October. Yet, sellers quickly extinguished the bullish fire with a 7% price dump over the past three days.
Furthermore, the RSI (Relative Strength Index) highlighted the strong selling pressure, dropping into the oversold zone with a reading of 29. Similarly, the OBV (On Balance Volume) registered another downtick to hint at waning interest in a price reversal.
As such, DOT could still sink below the $3.6 support level, with more shorting gains possible for sellers at $3.
Bearish sentiment persisted in futures market
The data from the derivatives market wasn’t encouraging for buyers. According to Coinalyze, the Open Interest rose as price declined. An increase in Open Interest along with a decrease in price mostly indicates an influx of new short positions.
How much are 1,10,100 DOTs worth today?
As such, this could see an extension of DOT’s bearish downtrend in the long term.
Furthermore, the Funding Rate fluctuated between negative and positive, although it was largely negative for the time period under consideration. This could limit any bullish scenario for DOT, with the higher timeframe market structure remaining firmly bearish.