Polkadot (DOT) – Testing key support to stretch the current bearish trajectoryPosted on Wednesday, May 11 2022 at 9:02 pm GMT+0000
Polkadot (DOT) fell without a parachute over the last month stretching its bearish structure to levels not seen since January 2021 amid a vast panic sell-off in the crypto arena.
Even though the price reached the 161.8% Fibonacci extension level of the March bullish leg, the descent is showing limited signs of slowing down. Reinforcing this viewpoint are the negatively charged 20- and 55-day simple moving averages.
Momentum oscillators paint an equally grim picture. The MACD keeps strengthening its negative impetus well below its signal and zero lines, the ROC is sliding aggressively below its equilibrium and the momentum indicator dipped to its lowest since late January.
So, the bears are confronting the Fibonacci golden number at 8.19, intending to further deepen the slide. By snapping that crucial barrier and the neighboring 6.30 congested region which was active in the period between November 2020 and January 2021, they will head towards the 227.2% Fibonacci level at 1.88.
However, if the former Fibonacci level managed to help the coin to stand back on its feet, the price will jump back to the late February bottom at 14.17. The adjacent 20-day simple moving average could cement that ceiling, shutting the doors for any further advances towards the 55-day simple moving average and the March 1st inside swing high at 19.61. Creeping further up, the price will likely meet the last top at 23.83.
Summarizing, Polkadot continues to exhibit a sharp bearish trajectory while testing a significant support, a breach of which will further intensify negative pressures.