- Polkadot’s future does not look good as it breaks a key support level to trade below $9 and loses 12% of its value in two days.
- Analysts have observed that the price of DOT is no longer directly correlated with its Development Activity, linking its previous price growth to external factors.
Polkadot’s (DOT) recent recovery attempt into a new height became worse as it lost another 12% of its value in just two days in the ongoing broad market correction. Interestingly, its year-to-date return has also been negative as it slips below $9 to trade at $8.4.
Despite the month tipped to be a strong recovery period, DOT appears to remain extremely lower than its levels in October 2023. A look at its current market dynamics also shows that the asset is looking bearish with the Relative Strength Index (RSI) indicating a reading below the neutral threshold of 50.
With investors hoping for a comeback, analysts have observed a death cross on its 4-hour chart characterized by the 50-day Exponential Moving Average (EMA) crossing below the 200-day EMA. This implies that the bearish trend could be extended and the possibility of a sudden bullish reversal remains low. According to analysts, the asset could likely fall to $8.10, and subsequently slip below that support level to reach $7.
Price of DOT Moves Opposite to its Development Activity
The price of Polkadot had always correlated with its network activities until it started moving the opposite from January 2024. Per data, its development activities saw a growth rate of 8.45% between January 14 to January 31. Within that same period, the price declined from $7.33 to $6.64. The same scenario replicated between February 11 and February 19.
Within the period, Polkadot’s Development Activity declined by 12%. However, its price surged from $7.01 to $8.03. In an attempt to explain this, analysts have disclosed that all of DOT’s price surges in 2024 – $8.60 on January 1 to $11.6 on March 13 are due to the influence of external factors rather than fundamentals.
Dot’s current price trajectory unexpectedly invalidates the bullish formation observed in its technical charts after moving from $7.72 to $9.19. Based on the market sentiment at that time, crypto analyst Michaël Van De Poppe predicted that DOT may reach an All-Time High soon.
At that time, its technical analysis showed that the asset was trading above 50 and 100-day EMAs. On top of that, 18 technical indicators gave a bullish signal, causing some experts to predict a $12.25 for the asset in Q2 of 2024. Poppe specifically predicted that the asset could hit $17 from the $9 price point as formerly reported by Crypto News Flash.
The higher low was established for $DOT. The whole ecosystem is thriving after Polkadot 2.0, through which the trend is reversed towards an upward trend. I’m expecting a breakout to happen above $9.40 towards $17…This bullish sentiment is supported by technical indicators, including an inverted head and shoulders pattern on the weekly chart and a rising divergence on the Relative Strength Index (RSI). Should the weekly RSI breach the 70 mark, DOT could be set for a parabolic ascent, potentially surpassing its all-time high.
