Polkadot (DOT) – Will further deteriorate the medium-term outlook with a break below 5.65Posted on Monday, October 24 2022 at 9:06 pm GMT+0000
Polkadot (DOT) has been creeping lower over the last few days, after failing to stretch the last bounce from a 22-month low of 5.65, beyond the 20-day simple moving average.
Technically, the negatively charged moving averages are sponsoring the medium-term bearish structure of lower tops and lower bottoms, and the oscillators are suggesting that the descent may see further continuation. The RSI is looking to stretch its downtrend below the descending trendline, and the Awesome Oscillator is plunging beneath the zero line.
Hence, a decisive close below the 13th of October low of 5.65, will boost selling interest initially towards the 161.8% Fibonacci extension level of the last up-leg at 5.25. Another collapse here may squeeze the price directly to the 261.8% Fibonacci extension level at 4.60.
Alternatively, if the bulls manage to set a foothold around the current levels, they may then attempt to pilot higher toward last Tuesday’s peak at 6.30, fortified by the 40-day simple moving average. A significant close above these barricades will bring the September 27th top at 6.81 directly into scope. Another move higher from here will notably harm the three-month downtrend, and likely motivate a strong rally toward the September 12th high at 8.05.
All in all, Polkadot is currently holding a robust bearish structure in the medium-term picture, and following a break below 5.65, the sell-off will accelerate initially towards 5.25.