- Polkadot price is shown significant bearish signals during the final trading week of October.
- DOT shows an influx of volume throughout the downtrend.
- Invalidation of the bearish thesis is a breach above $6.27.
Polkadot price could be setting up for an 8-10% decline; key levels have been identified,
Polkadot price is underwater
Polkadot price might be setting up for a flash crash scenario. For the month, the DOT price is down 8%. However, the bears seem to be developing momentum as large bearish engulfing candlesticks accompanied by upticks in the volume are noticed within each declining rally.
Polkadot price currently auctions at $5.88 as the bulls have been recently rejected near the 8-day moving average after a weekend. As a result of the rejection, the first candle is a bearish engulfing candle resembling price action in previous declines. Additionally, the rejection was the first response for the DOT price after climbing out of the oversold territory
DOTUSDT 6-Hour Chart
Based on the technicals, the DOT price has space to climb, but traders should be very cautious. A second attempt at the $5.70 low should not be considered a buy-the-dip opportunity. A breach of the lows could induce a flash crash towards the $5.30 liquidty zones resulting in a further 10% decline.
Invalidation of the bearish thesis can occur if the bulls reconquer the$ 6.40 swing high produced on October 17. An additional rally towards $7.00 could occur if the breach occurs, resulting in an 18% increase from the current Polkadot price.
In the following video, our analysts deep dive into the price action of Polkadot, analyzing key levels of interest in the market. -FXStreet Team
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