Polkadot Price Analysis: Bearish Forces Continue To Melt Price?

18 Sep

Polkadot Price Analysis: Bearish Forces Continue To Melt Price?
Plokadot was exchanging close to $4.05 losing 2.43% a day.
The RSI and 14 day SMA line showcased a bearish crossover indicating sellers' domination in the near term.

Despite a strong recovery and improving sentiments in the crypto sector, Polkadot kept on melting down. Bitcoin has edged close to the 60K mark indicating a renewed confidence among investors and triggering a buy signal in several altcoins.

however, Polkadot has failed to benefit from the improving market sentiments. At the time of writing, Polkadot was exchanging hands close to $4.05 recording an intraday loss of 2.05%. Currently at $6.048 Billion, the market cap of Polkadot has dropped by nearly 6% a week, due to the impact of negative sentiment.

However, despite the downtrend, the price still hovers above the September lows, with investors anticipating a reversal. It remains to be seen whether the DOT bulls may register their presence to defend the monthly lows and make an effort for a price improvement.
Derivatives Traders Liquidating Their Positions
Polkadot price has been under the control of bears since mid March. During the period, DOT has plummeted nearly 66% from its annual high. The key EMAs have been acting as a dynamic resistance as the price has suffered rejection multiple times.

<iframe title="Santiment Chart: Total Open Interest in USD (DOT), Price (DOT)" width="800" height="425" src="embed.santiment.net/chart?ps=polkadot-new&pt=DOT&df=2024-06-17T18:30:01.070Z&dt=2024-09-18T18:29:59.070Z&emcg=1&emhwm=1&wm=total_open_interest;price_usd&wax=1&wc=#FF5B5B;#26C953&ws={"node":"area"};" scrolling="no"></iframe>

In tandem with the price drop, the Open interest contracts have noted a liquidation on the long side. As per Santiment, the open interest contracts have dropped from $112 Million to $105 Million losing 6% In the last couple of sessions.

Moreover, the daily transaction volume has surged by 21% a day to $122.65 Million. The volume to market cap ratio at 1.99% suggests low volatility in the crypto.
Polkadot Bulls May Look To Defend The Lows
Despite the recent drop, DOT investors remain optimistic about a potential buying from the monthly lows. Interestingly, the selling pressure has not invalidated a consolidation near the demand. Instead the accumulation has intensified for nearly 45 days adding hopes of a certain buying to the investors.

Moreover, the trend outlook is bearish in the long term which has been a concern for the buyers. DOT price lags nearly 44% below the 200 day exponential moving average indicating a bearish control.
Polkadot Price Prediction: Is September Low In Danger?
Despite the recent efforts by the bulls and improved sentiments in the broader market, Polkadot has been unable to showcase recovery. recently, the bulls attempted for a recovery, however suffered rejection and price declined losing all the gains.

while applying, Fibonacci retracement tool from the recent swing high at $5.15 to recent swing low at $3.8, the golden zone was observed between $4.4 to $4.6 level. The golden zone is crucial for the price to maintain a particular trend.

Looking precisely over the charts, it was observed that the same area acted as a reversal zone for Polkadot price. A rejection from the golden zone of Fibonacci validated the presence of sellers at the higher levels. on the lower side, a breakdown below the recent consolidation may indicate a bearish continuation.

Additionally, At the time of writing, RSI line and 14 day SMA line showcased a death crossover indicating a bearish continuation in the short term.