- Polkadot [DOT] falls below the crucial $4 mark, heading towards the next support at $3.6.
- High selling positions on Coinglass indicate a 52.85% market dominance by shorts over DOT’s market.
According to a recent observation from Coinglass, Cryptocurrency Longs vs Shorts, Polkadot [DOT] witnessed a significant dip after failing to hold onto the $4 threshold. Over the last two days, the cryptocurrency has plummeted by 5.9%, pushing it towards the $3.6 weekly support level.
The beginning of October hasn’t been kind to DOT holders. Reports from AMBCrypto suggest that from the 2nd to the 10th of October, DOT’s value depreciated by over 10% due to mounting bearish momentum.
Analyzing the Sharp Downtrend
Breaking down the 12H price chart for Polkadot, it’s clear that sellers have taken the reins. The decisive breach below the $4 support on 9th October led to DOT showcasing multiple consecutive bearish candlesticks. This rapid price decline towards the $3.6 support level indicates prolonged bearish pressure, with the prospects of a bullish comeback appearing dim.
Upon examining the on-chart indicators, it’s evident that it’s a challenging phase for DOT investors. The On Balance Volume (OBV) continuously trends downward, and the Relative Strength Index (RSI) has plunged into the oversold territory. Both metrics underscore the substantial selling influence over DOT’s price. Further adding to this bearish sentiment, the Chaikin Money Flow (CMF) took a sharp turn to -0.20, indicating a massive capital outflow from DOT.
Moreover, with Bitcoin [BTC] trading below $27k, this trend might prolong, allowing sellers to further capitalize in the near future.
Futures Market Swings in Favor of Sellers
An intriguing insight from Coinglass reveals the sellers’ dominance in the futures market. The Exchange Long/Short ratio on the platform discloses that selling positions have outpaced buying ones by a whopping $7 million, translating to a market control of 52.85% by shorts. Such data suggests that the sellers might continue to dictate DOT’s price movement, especially with the current market correction in play.
