• Sun. Apr 14th, 2024

Have bears hit bottom for Polkadot?

Polkadot (DOT/USD) is down 1.44% in the past week. However, early signs are that the bear momentum is slowing down. The cryptocurrency trades at just $6.10, a level it has held for the past one month. There were market crashes after news showed US inflation worsened last week, pushing the token to $5.65. DOT has since recovered, albeit slowly. Are we staring at the bottom?

Well, Polkadot’s fundamentals remain sound. During September, development activity on Polkadot hit an all-time high. More than 66 blockchains are currently live on Polkadot and its parachain network Kusama. But as we all know, these strong fundamentals are nothing in a strong bear market.

As the clock ticks towards November, most cryptocurrencies are consolidating, if not falling. DOT remains one of them amid the growth of the ecosystem. Investors remain cautious ahead of the Fed’s November meetings. The expectation is that the central bank will hike rates by 75 basis points to tame rising inflation. The expectation has formed part of why most cryptocurrencies are showing less enthusiasm, including Polkadot’s DOT.

Polkadot consolidates below $6.5

Source – TradingView

On the technical front, the RSI remains below the midpoint suggesting there are more sellers than buyers for Polkadot.

The failure of buyers to break above $6.5 for the past month suggests an intense war with the sellers at the current zone. Whereas the bulls are trying to defend $6.0, we cannot ascertain whether DOT is at a bottom price yet. If the bear sentiment continues, we could see the token reclaiming lower levels.

Alternatively, an improved sentiment could see bulls capture the $6.5 and turn it into support. If that happens, bulls will try to take DOT higher, potentially back to $7.9.

Should you buy DOT

With price action showing a lack of directional movement and below resistance at $6.5, DOT can go either way. The token is not a buy at the moment.

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