Polkadot (DOT) – Downside risks lingering in the backgroundPosted on Thursday, March 3 2022 at 9:09 pm GMT+0000
Polkadot (DOT) has tiptoed to the downside after its 7 days upside correction peaked at 19.60 on Tuesday thanks to resistance from the 40-day simple moving average.
The falling simple moving averages are promoting the bearish trend in motion, and the oscillators are indicating that negative forces have been jump started. Both the momentum indicator and the RSI shifted south lately, and the latter dropped below its equilibrium line.
Following a drop below 18.34, sellers are expected to call for a fresh test of the February 24th bottom at 14.10. Breaching that floor will attract significant selling interest, with the price likely slumping towards the 161.8% Fibonacci extension level of the last week’s upward swing at 10.65. While sharper declines should reach the 261.8% Fibonacci extension level at 5.15.
Alternatively, if buyers regroup, they will first need to push the price beyond the nearby 40-day simple moving average at 18.80 in order to climb towards the strong resistance area of 23.00 -24.50, which encapsulates the 23.6% Fibonacci retracement level of the broad downtrend, the 100-day simple moving average, and the February 8th top. Any violation at that point will shift focus towards the January 15th peak at 28.50.
To summarize, downside risks are still lingering in the background despite last week’s rebound, and a decisive close underneath the 18.34, will trigger a new selling phase likely towards fresh lows.