Polkadot Flashes Warning Signs as Price Targets $7.75

Is Polkadot (DOT) Showing Signs of Trouble Amid Broader Market Recovery?
Source: Binance Academy

Polkadot (DOT) faces a growing possibility of consolidation or correction after key indicators across developer activity, momentum readings, and chart patterns all align bearishly. The leading “Layer 0” blockchain’s price remains up 32% year-to-date but shows signs of peaking as network growth stalls.

According to on-chain analytics provider Santiment, Polkadot development activity has declined for 13 days straight as of March 16th. This negative momentum threatens to derail the previous uptrend in builder participation that propelled DOT through most of 2024. 

Faltering developer work hints that the broader community is losing interest and reallocating activity elsewhere for the time being. And historically, Polkadot’s price tends to follow development trends over lengthy periods.

What’s next for Polkadot?

Adding doubts around the rally’s sustainability is DOT’s relative strength index (RSI) plunging from extreme overbought readings above 80 earlier this month back down to near 61 presently. This signals that short-term buying pressure has eased significantly and reflects a tentative pause in bullish enthusiasm.

Furthermore, DOT’s 4-hour price chart just produced a bearish “death cross” pattern with its 20-day exponential moving average crossing below its 200-day EMA. While not all shorter-duration moving averages have crossed the long-term trend just yet, death crosses typically portend the start of downtrends. 

If selling pressure intensifies further, Polkadot faces significant support around the $8.33 zone, with panic likely accelerating towards the next floor around $7.75 should prices breach lower. That would trigger a drop of approximately 13.7% from current levels.

Of course, Polkadot retains a loyal community, and prices could swiftly reverse on positive headlines. But its prevailing technical picture presents a cautionary tone for traders to watch, at least until confirmation arrives that this promising network can regain positive traction.

Leave a Reply

Your email address will not be published. Required fields are marked *

Previous Post
Goldman Sachs Forecasts $200 Billion Global Investment in AI by 2025

Top AI Coins That Could Surge Ahead of Nvidia Event

Next Post
Cardano (ADA) Faces Bearish Sentiment Amidst Whale Activity: Is Opportunity Knocking for Investors?

Cardano (ADA) Faces Bearish Sentiment Amidst Whale Activity: Is Opportunity Knocking for Investors?

Related Posts